Inflation, rising rates and market volatility have been cooling the housing market lately. Half of the 10 fastest cooling markets are on the West Coast, with Seattle leading the pack, followed by San Jose, California; San Diego; Sacramento; Denver; Phoenix; Oakland, California; North Port, Florida and Tacoma, Washington. The other half are concentrated in Florida and Texas, according to a new Redfin survey.
What these locations all have in common is that they are markets that have long been expensive, or places that became significantly less affordable during the pandemic, the new Redfin survey finds.
The survey analyzed housing metrics, including prices, price drops, supply, pending sales, sale-to-list ratio and speed of home sales.
“These are all places where homebuyers are feeling the sting of rising home prices, higher mortgage rates and inflation very sharply. They’re slowing down partly because so many people have been priced out and partly because last year’s record-low rates made them unsustainably hot,” Redfin Chief Economist Daryl Fairweather, said in a press release. “The good news is that the slowdown is dampening competition and giving those who can still afford to buy more negotiating power.”
The fastest cooling housing markets that are not on the West Coast include North Port, Florida.; Austin, Texas, Raleigh, North Carolina, Cape Coral, Florida, Jacksonville, Florida and Tampa.
Redfin notes that while homes are still more expensive than pre-pandemic, with demand slowing, prices are decreasing too.
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“The housing market has changed very quickly in buyers’ favor,” Las Vegas Redfin agent Tzahi Arbeli said in the release. “Not only have prices fallen in recent months, but sellers see the market cooling and they’re more open to negotiating prices, giving concessions and paying closing costs. They may accept an offer that’s $20,000 below asking price and pay for repairs the buyer found during an inspection. Sellers can still get a fair price-but it’s with the understanding that they may have to wait several weeks for the right offer, and buyers are no longer willing to overpay.”
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