U.S. home values finally fell year over year in February nationwide, marking the first decline in more than a decade, according to a new analysis by real estate brokerage firm Redfin.
In the four-week period ending Feb. 26, U.S. home prices were down 0.6% year over year, to a median of $350,246.
Mortgage rates once again jumped in February and recently hit their highest levels since November. That forced sellers to lower their asking prices to make them more affordable to potential buyers.
In a summary of Redfin’s findings, Taylor Marr — Redfin deputy chief economist — says:
“Prices falling from a year ago is a milestone because it hasn’t happened since the housing market was recovering from the 2008 subprime mortgage crisis. But it’s not surprising and in many ways, it’s welcome.”
Prices in February dipped especially sharply in some metros. In four of the top five declining markets, values fell by more than they have at any time since Redfin began keeping data in 2012.
Following are the top five declining markets, including the four that just saw their worst home declines in more than a decade (which are all except for San Jose).
Year-over-year change in the median home sale price in this metropolitan area: 7.3% decrease as of February
During the height of the pandemic, Phoenix had one of the hottest housing markets in the nation.
But things changed in 2022. By December, Phoenix was among the “9 Markets Where Home Values Have Fallen as Much as 10.6%.”
4. Sacramento, California
Year-over-year change in the median home sale price in this metropolitan area: 7.7% decrease as of February
Demand has been cooling in much of California, and the state capital of Sacramento is no exception.
By December, the city was officially one of the “10 Pandemic Boomtowns Where Housing Now Is Cooling.”
3. Oakland, California
Year-over-year change in the median home sale price in this metropolitan area: 10.4% decrease as of February
Not only are prices sliding in Oakland, but the city also is in greater danger at the planet warms, as we reported in “These 10 Cities Are Most at Risk From Climate Change, Experts Say.”
2. San Jose, California
Year-over-year change in the median home sale price in this metropolitan area: 10.9% decrease as of February
Home values are falling in San Jose, but no one would call them affordable.
Lower-income workers trying to finding housing in the city recently got a boost as San Jose became one of the “57 Cities and Counties With Higher Minimum Wages in 2023.”
San Jose is the only market on this list that did not experience a record slippage in prices during February.
1. Austin, Texas
Year-over-year change in the median home sale price in this metropolitan area: 11% decrease as of February
Austin has the dubious distinction of being the metro where prices are falling fastest. Values may continue to decline in the Texas state capital throughout the year, as we reported in “4 Places Where Home Prices Could Plummet Up to 19%.”
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