- Several cities are experiencing serious slowdowns in their housing markets, according to new research.
- Eleven cities in particular have experienced statistically significant declines in construction employment, a crucial indicator for housing.
- Eight of these 11 cities have cut their listing prices by more than 20 percent.
Housing has recovered quite a bit from the crash of 2007-08, with many markets surpassing peaks reached during the bubble years. Recently, however, news has been appearing that housing could be weakening. According to CNBC, homebuilder sentiment, an index measuring builder confidence, has plummeted to its lowest point in more than three years.
In order to help identify cities where the housing sector is weakening most, GOBankingRates analyzed data from the U.S. Census Bureau’s 2017 American Community Survey on the percentage of the labor force employed in construction from 2015 through 2017, as well as data from Zillow, such as home prices and its buyer-seller index. To be considered, cities had to have a population (16 years and over) of at least 70,000. Find out which cities’ housing markets could be in for a serious slump.
Is the Housing Market Going Down?
If you’re wondering, “Is the housing market going to crash soon?” look to housing construction as it is generally one of the main employers of those in the construction industry. Hence, declines in construction employment can be a helpful indicator of a slowdown in the housing sector.
Additional key data points are home listing price vs. home sales price: A lower sales price means the listing price was cut, usually due to factors like reduced demand. Zillow also calculates a buyer-seller index on a scale from zero to 10. Zero means the market is “very hot” — a total sellers’ market; 10 means “very cool” — a total buyers’ market.
Cities Where the Housing Boom Is Declining
Here’s a breakdown of the top cities where the housing boom is coming to an end and relevant data points:
Cities Where the Housing Boom Is Over
|City||State||Percent of Labor Force in Construction|
|2017||2016||2015||Buyer-Seller Index||List Price||Sales Price|
|Town ‘n’ Country||Florida||5.1%||8.2%||8.6%||5.6||$239,900||$197,000|
|West Palm Beach||Florida||5.9%||7.3%||8.1%||8.4615||$289,900||$206,800|
Data from Zillow and U.S. Census Bureau.
One city, Huntington Beach, Calif., has more than a $100,000 difference between its median listing price and its median sales price. In fact, nearly a quarter of homes (23.25 percent) have had their listing price cut, according to Zillow.
Three other cities — Allen, Texas; West Palm Beach, Fla.; and Naperville, Ill. — have more than a $50,000 difference between list and sales price. Allen and West Palm Beach also have the “coldest” markets, having the first and second-highest buyer-seller index score.
Click through to read more about major cities where home prices are plummeting.
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Methodology: GOBankingRates analyzed U.S. Census Bureau data from its 2017 American Community Survey to determine which cities saw the largest percentage declines in labor force employed in construction. Also analyzed was housing data from Zillow, including median home list price vs. sales price, and buyer-seller index.