The upward march of U.S. home prices during the COVID-19 era has seemed to be virtually unstoppable, but according to Realtor.com, the market may be showing signs that this trend is finally starting to slow.
The real estate website identified the U.S. markets where prices are not only falling – but falling considerably. To do so, Realtor.com compared March 2022 median list prices to the same month one year ago, identifying cities where prices have fallen the most and limiting its list of 10 to one metro per state for geographic diversity.
The decreases are happening for a variety of reasons. In some areas, prices simply grew higher than what many locals could afford, while in others, fewer larger homes (which typically fetch higher sale prices) are left on the market.
“Many of the metro areas seeing median list-price declines have seen an [influx] of smaller homes come to market, which carry lower price tags,” said George Ratiu, manager of economic research for Realtor.com. “At the same time, several of the cities have unemployment rates which, while still historically low, are above the national level. [This indicates] that buyers may face steeper affordability challenges from rising mortgage rates.”
Highest on Realtor.com’s list is Toledo, Ohio, where the median listing price in March was $115,000, down 18.7% year over year. Competition is still common, but unemployment in the city is high, so prices are softening because many would-be buyers are simply getting priced out.
“I have more and more buyers that are starting to lean toward, ‘We’ll do some cosmetics, we’ll do some work,'” said Karen Kinder, a real estate professional with Key Realty in the Toledo area. “They’re open-minded to that now; even just a few years ago, they all wanted everything all fixed up.”
Other cities that made Realtor.com’s list of 10 include Rochester, New York (where prices are down 17% year over year); Springfield, Massachusetts (down 5.8%); Tulsa, Oklahoma (down 5%); and Richmond, Virginia (down 3.4%).
Notably, several larger markets were spotlighted by Realtor.com. Five of the nation’s 35 largest metros were in Realtor.com’s top 10: Detroit (down 15.4% since March 2021), Pittsburgh (down 13.7%), Los Angeles (down 5%), Memphis (down 4.6%) and Chicago (down 3.7%). Affordability between cities on the list varies, of course, as the median list price in Los Angeles as of March ($985,000) was more than six times that of Rochester ($149,900).