National Trends
On a broad scale, home prices have surged skyward: Over 85% of metro areas experienced home price increases in the fourth quarter of 2023, reveals a recent report from the National Association of Realtors (NAR).
Optimism for Homebuyers
Despite the discouraging news for aspiring homeowners, hope may still be on the horizon regarding housing market conditions. Forecasts suggest a potential decrease in mortgage rates for 2024. Additionally, there are specific housing markets where home prices have actually been on the decline. In fact, a notable 14% of markets examined in NAR’s survey witnessed decreases in home prices during the same quarter.
Regional Realities
Kate Wood, a housing expert at NerdWallet, emphasizes the importance of considering the local context when assessing real estate trends. While the general trend may show an increase in average home prices nationally, individual locations can tell a different story. Therefore, it becomes crucial for buyers and sellers to pay attention to their specific area’s pricing dynamics. Even if listing prices are rising on average, there might still be opportunities to secure a property at or below the asking price in certain regions.
Identifying Home Price Declines
Curious about where these downward trends in home prices are taking place? Let’s delve into the top 10 housing markets that experienced significant price decreases between the fourth quarter of 2022 and 2024, as detailed by NAR:
- Market A
- Market B
- Market C
- Market D
- Market E
- Market F
- Market G
- Market H
- Market I
- Market J
Areas in the Sunbelt Experiencing Inventory Recovery and Price Adjustments
“After seeing relentless demand and skyrocketing prices, areas in the Sunbelt are finally seeing inventory recover and prices adjust,” explains Hannah Jones, economic research analyst at Realtor.com, about some of the markets where home prices declined. The Florida metros of Naples-Immokalee-Marco Island, Punta Gorda, and North Port Sarasota-Bradenton saw inventory levels climb more than 50% year-over-year and even as much as 125% in Punta Gorda, in the fourth quarter of 2023. As inventory built up in many of these areas, buyers bought more affordable homes and sellers likely softened prices in order to attract buyer demand.
Factors Influencing Price Trends
It’s also likely that the cities with declines in home prices saw these trends due to factors such as limited inventory and high housing costs compared to previous years, says WalletHub analyst Cassandra Happe. “These areas might have faced challenges in housing affordability despite marginal improvements in the overall housing market, leading to decreased demand and subsequent price declines,” Happe says. Additionally, economic factors unique to each region, such as job markets and local industries, could have influenced the housing market dynamics.
Future Forecast: Top 5 Markets at Risk of Home Price Decline
Where might prices drop next? Information services company CoreLogic’s latest Market Risk Indicator (MRI), published last month, predicts a “very high” risk of home prices dropping in these five markets over the next 12 months. The forecast analyzes 392 major metros using variables like price, time between sales, property type, loan type, and distressed sales.
Your Local Real Estate Market
So what does this all mean for homebuyers? One big thing is that you need to remember that “real estate is very local,” says Jacob Channel, senior economist at LendingTree.
Expert Advice on Navigating the Real Estate Market
As a professional copywriter in the real estate industry, it is essential to understand the importance of thorough research in your specific area. Jeff Taylor, managing director at Digital Risk, emphasizes the significance of conducting detailed analysis when it comes to pricing in local markets. According to Taylor, gaining insights from local realtors can provide you with the necessary data to make informed decisions when buying or selling a home.
Dive Deep into Market Trends
Taylor highlights the need for street-by-street pricing analysis in each local market. By delving into the nuances of pricing trends, you can better navigate the ever-changing landscape of the real estate market. Leveraging the expertise of local real estate professionals can offer valuable insights that are crucial for making strategic decisions.
Utilize Data for Smart Decision-Making
In today’s competitive real estate market, having access to accurate and up-to-date information is key. By arming yourself with the right data, you can stay ahead of the curve and make informed choices that align with your goals. Collaborating with local realtors can provide you with a wealth of knowledge that will empower you to make smart and savvy moves in the housing market.
