If you've wanted to buy a home but have been priced out of the housing market, the pendulum between a seller's and a buyer's market may be swinging in your favor.
The real estate market has had a tumultuous few years since 2020. At the onset of the pandemic, sales plunged sharply, as COVID-19-related uncertainty scared people away. But in June 2020, people jumped back into the market, looking for yards and larger homes in the suburbs, which were better suited for riding out the pandemic. Existing inventory plummeted, and constructing new homes was limited as supply chain issues and labor shortages meant that builders couldn't keep up with demand. Prices have soared nationwide since autumn 2020— breaking historic records along the way—but now previously hot markets are finally showing signs of a slowdown.
Agent Advice examined September listing data from Realtor.com to see which major metro areas are seeing the largest share of price reductions. This analysis was limited to the 250 largest metropolitan areas, including the main city and surrounding towns and suburbs. Price reductions are the number of listings that have had their list price dropped within that area during the month of September. Reductions are a sign sellers may be expecting too much for their properties, especially as the Fed's increased interest rates have begun to put pressure on buyers.
The median list price for a home in the U.S. was $427,000 in September 2022, down slightly from a record high of $450,000 in June of the same year, according to Realtor.com listing data. However, home prices are still up by double digits from the same time a year ago.
Many metro areas on this list are areas in the Western U.S. that saw rapid price growth spurred by the COVID-19 pandemic, as people in work-from-home situations opted to leave densely populated, comparatively expensive metros for smaller, more affordable cities. In Austin, for example, a Texas-sized slowdown could be in the offing. While median housing prices are still increasing—up 17.4% from the previous year in the second quarter to $546,000—pending sales are down 12%, and houses are staying on the market a few days longer. Inventory is also rising to levels not seen since November 2019.