10 Pandemic Boomtowns Where Housing Now Is Cooling

During the 19th century Gold Rush, boomtowns appeared overnight, only to disappear just as quickly when prospectors failed to find fortunes.

When the COVID-19 pandemic arrived, another type of boomtown sprang to life. These were the cities — some, though not all, with more affordable housing — that drew scores of remote workers, retirees and others in search of a new life.

But almost three years later, these boomtowns are starting to look like “fool’s gold.” Many of the cities where housing was red-hot in February were cooling rapidly by October, according to real estate service Redfin.

That means folks who bought homes earlier this year — during the peak of the price rise — soon may find that they have lost money on their purchase.

Following are the pandemic boomtowns where prices are cooling the fastest.

Seattle

Year-over-year change in this market’s median home price per square foot as of:

• February 2022: 22.2%
• October 2022: 3.6%

Change from February through October: -19 percentage points

Seattle long has been an expensive place to live, but people willingly pay that price simply to be located in the jewel of the Pacific Northwest.

However, prices in this market suddenly are cooling rapidly, at least for now.

Colorado Springs, Colorado

Year-over-year change in this market’s median home price per square foot as of:

• February 2022: 22.5%
• October 2022: 3.8%

Change from February through October: -19 percentage points

In recent years, people have flocked to Colorado, and it’s no surprise why: Mountains, outdoor activities, great weather — what’s not to love?

Colorado Springs is a lot more affordable than cities like Seattle or San Jose, California. Yet, housing prices have also jumped here over the past several years, and that rapid rise set the stage for today’s moderating prices.

Riverside, California

Year-over-year change in this market’s median home price per square foot as of:

• February 2022: 25.6%
• October 2022: 6.8%

Change from February through October: -19 percentage points

As we recently reported, Riverside is one of “10 Housing Markets Where Bidding Wars Are Disappearing.”

It’s still expensive compared to many places in the U.S. But by Southern California standards, Riverside is a relative bargain.

Sacramento, California

Year-over-year change in this market’s median home price per square foot as of:

• February 2022: 20.8%
• October 2022: 1.2%

Change from February through October: -20 percentage points

In August, we reported that California’s capital city was one of “10 Cities Where Home Inventory Is Rising Fast.”

When there are more homes available for sale in a market, price gains quickly start to evaporate.

Oakland, California

Year-over-year change in this market’s median home price per square foot as of:

• February 2022: 19.3%
• October 2022: -0.6%

Change from February through October: -20 percentage points

In September, there already were signs that Oakland’s housing market was in for a big cooldown.

The Redfin numbers for October confirm that the market is coming back down to earth in Oakland.

Boise, Idaho

Year-over-year change in this market’s median home price per square foot as of:

• February 2022: 20.1%
• October 2022: 0.0%

Change from February through October: -20 percentage points

Boise was one of the biggest beneficiaries of the pandemic trend toward remote work. Suddenly, workers who had squeezed into tiny apartments in San Francisco could take their jobs to a less-crowded and more-affordable place like Idaho.

But as often happens with any boom, things are reverting to the mean in a hurry in Boise.

Las Vegas

Year-over-year change in this market’s median home price per square foot as of:

• February 2022: 29.3%
• October 2022: 8.0%

Change from February through October: -21 percentage points

Las Vegas has witnessed all kinds of booms and busts during its colorful history, and the local housing market is no exception.

More than a decade ago, the market soared before the Great Recession, only to crash hard. Is history repeating itself today in Sin City?

San Jose, California

Year-over-year change in this market’s median home price per square foot as of:

• February 2022: 20.4%
• October 2022: -1.6%

Change from February through October: -22 percentage points

We recently reported that San Jose topped the list of “3 Markets Where Home Prices Have Dropped by More Than 10%.”

Real estate data and analytics company Black Knight says that in recent months, more home equity has vanished here than in any other major U.S. metro.

Phoenix

Year-over-year change in this market’s median home price per square foot as of:

• February 2022: 28.7%
• October 2022: 6.0%

Change from February through October: -23 percentage points

Phoenix is among the “10 Markets With the Most Home Sales Getting Canceled,” as we recently reported.

Those cancellations mean more houses for buyers to choose from, which tends to cool frenzied buying. The result is moderating home prices.

Austin, Texas

Year-over-year change in this market’s median home price per square foot as of:

• February 2022: 24.2%
• October 2022: 1.3%

Change from February through October: -23 percentage points

Like Boise, Austin was a magnet for new residents during the height of the pandemic.

But after years of intense competition among buyers seeking new digs, things are quieting down in Texas’ capital city.