In cities like Tacoma and San Jose, the median home listing price has skyrocketed over the past year as the housing boom rolls on. But in other markets, listing price growth has stagnated.
In six of the nation’s 100 largest housing markets, the median listing price has remained unchanged or dropped from 2017 levels, according to research from real-estate website Trulia. And in another four markets, the median listing price has risen by less than 1% year over year.
For some of the markets where median listing prices decreased or stagnated, such as Honolulu or Sarasota, Fla., this change appears to be indicative of stabilization after a long bull run in these local housing markets, Trulia noted. The median listing price has risen 21% in Sarasota and nearly 18% in Honolulu since March 2015.
That’s roughly in line with the growth in listing prices that have occurred at the national level. The national median list price now rests at $273,663, which is roughly 20% higher than in March 2015. Over that time, the pace at which home list prices have increased has risen nationally. Between 2015 and 2016 the national median listing price only rose 4.8%, but over the last year, it increased by 7.4%. And housing analysts have grown increasingly concerned with how sustainable this boom is.
8 Metros Where Prices are Falling the Most
To figure out where prices are coming down, we compared two years of median list prices in the 350 largest metropolitan areas from realtor.com listings data. We compared the 12-month periods from May 2016 to April 2017 with May 2017 to April 2018 to come up with our findings. Then we ranked metros that saw the biggest price cuts.
Now let’s take a look at the metros where buyers can still get a home for a discount. Maybe even a deep discount! (Calculated using realtor.com listings data)
1. Santa Barbara, CA
Median home list price: $951,600
Price drop*: -17.7%
The tony swath of California coast, almost two hours north of Los Angeles, got hit with a double whammy of natural disasters over the past year. First, wildfires swept through in July, burning almost 50,000 acres and destroying nearly 20 homes. Then in January, a series of mudslides hit Montecito, CA, an ultra-pricey market in the county with lots of luxurious mansions owned by celebrities such as Oprah Winfrey.
The mudslides killed more than 20 people and toppled many homes. The state projects they caused more than $400 million in damages. As of last month, more than 1,400 insurance claims for homes had been received.
The disasters kept both buyers and sellers from making any sudden moves as they waited to see what would unfold, says local real estate broker Terence Alemann, of Alemann and Associates. And those stalled sales in places such as Montecito, where the median home list price is a whopping $3 million, have helped to drag down overall prices.
All of that devastation and uncertainty took a toll on the market. Damaged properties, or homes in close proximity to them, are being marked down substantially compared with those in pristine condition and areas. And some buyers have been more hesitant to jump into the market.
“People who might have considered buying there are going to think twice,” says Blomquist. “People think it could happen again.”
2. Pottsville, PA
Median home list price: $72,300
Price drop: -8.1%
The Great Recession hit the manufacturing sector of Pottsville, home to the Yuengling brewery (America’s oldest!), hard. And while the economy is improving with large distribution centers opening up in the region, that recovery has been decidedly uneven.
The unemployment rate hit 5.7% in March, well above the national average of 4.1%. That’s left fewer folks with the means to become homeowners.
“Homes between $50,000 to $125,000 aren’t selling as fast” as they were last year, says Erica Ramus, owner and broker at Ramus Realty Group. The lack of inventory is also working against homeowners potentially interested in trading up.
Most of the single-family residences that are available are mostly older Victorians, built in the early 1900s through the 1950s. But most local buyers are more interested in new construction, Ramus says.
“There just is not enough to choose from,” she adds.
3. Napa, CA
Median home list price: $823,900
Price drop: -6.7%
The vast 2017 wildfires that tore through Napa and other swaths of California’s lush wine country were the most deadly and destructive on record: 44 people were killed and over 8,000 homes and other buildings were destroyed across the region. A big part of that damage centered on beautiful Napa, so it’s no surprise that the housing market there has stumbled a bit while other parts of the state continue to soar.
“In the immediate aftermath [of the blazes], the market slowed down,” says Kristofer Chun, an associate broker at Kristofer Chun Real Estate, in Napa. The fires spooked insurers, making it harder to get mortgage insurance in the region, and made many would-be buyers a little skittish, he says.
The hardest-hit part of Napa was its northeast areas, including single-family, suburban homes near the renowned Silverado Country Club that were burnt to the foundations. Most of these homes were on the luxury side of the market and were priced between $1.5 million to $2.5 million.
“We are slowly seeing some of these burnt-out lots come on the market priced around $500,000,” Chun says. That’s a fraction of what they were valued at before the blazes when there were homes still standing on them. But new regulations and codes based in the wake of the fires might make these lots unbuildable, he adds. This could depress prices even further, at least for a time.
4. Austin, TX
Median home list price: $373,000
Price drop: -4.3%
For years, fun ‘n’ funky Austin has been experiencing a prolonged growth spurt. Folks move to the state capital of Texas, known for its live music scene, innovative food trucks, and burgeoning tech sector, from all across the U.S. (Its population shot up from 1.2 million in 2000 to 2.1 million in 2017.)
Builders responded in kind by putting up sleek, new apartment and condo buildings downtown and creating new subdivisions and communities of more suburban, single-family homes on the outskirts of the city and beyond. But they may have gone a bit overboard. After years of surging home prices, they’re finally beginning to head south as a result of that overbuilding.
Not only have prices dropped, but foreclosures are up, too. That’s a sign of an overheated market: If prices get too high, buyers might overextend themselves in an attempt to get their foot in the door. In the first three months of this year foreclosures in Austin increased 30% compared with the same period last year, according to ATTOM. Those increased foreclosures came from borrowers who bought homes a few years back when prices were lower—so recent borrowers who took out even higher debt loads might be headed for trouble.
“The Austin market has performed very well for the last few years, but it is not immune to some distress creeping in,” ATTOM’s Blomquist says. The surge in foreclosures means “some folks [are] getting into homes they couldn’t afford.”
Long before the rest of the housing market fully recovered from the last recession, Austin was growing at a rapid pace. If prices keep falling here, the rest of the country might want to hope the city isn’t a bellwether this time around, too.
5. Beckley, WV
Median home list price: $134,000
Price drop: -4.2%
Coal is a big part of Beckley’s past and present, so much so that the region even has an attraction called the Beckley Exhibition Coal Mine and Youth Museum. But lately, it hasn’t been easy having its fortunes tied so closely to this industry, which since the start of 2012 has shed 42% of its jobs nationwide.
“You don’t have the same number of [coal] employees as they’ve had in the past. They do a lot of it by machinery [now],” says Ellen Taylor, president of the Beckley-Raleigh County Chamber of Commerce.
But there are already signs that things are looking upward.
“We see businesses opening up, and we do a lot of ribbon cuttings these days,” Taylor says.
6. College Station, TX
Median home list price: $301,700
Price drop: -3.6%
College Station, about an hour and a half north of Houston and nearly three hours south of Dallas, is best known as the home of Texas A&M University and more than 68,000 students. But these Aggie football fans got a little carried away on their latest housing boom, putting up too many new residences. As a result, there are more homes for sale than buyers to scoop them up. Hence, the discounts.
“To be blunt, the housing market is crashing right now,” says Jeff Leatherwood, a broker at Aggieland Properties. “Properties built for the purposes of student housing are just overbuilt. We are a huge college town, and most of our market is rental properties.”
This overabundance of housing, particularly homes aimed at students, could get worse before it gets better, local professionals fear. The verdict will become clear once the school year starts up again.
“There is an air of doom and gloom,” Leatherwood says. “When the school year starts again in September, homes [that didn’t get student renters] will flood the market.”
7. Corpus Christi, TX
Median home list price: $237,600
Price drop: -3.1%
Before making landfall in Houston last August, Hurricane Harvey tore through Corpus Christi. The storm brought winds exceeding 130 mph to the city, leveling homes all over the region and causing billions in damages.
In some Corpus Christi communities such as Rockport and Aransas Pass, an estimated 80% of homes were damaged, according to the South Texas Economic Development Center. Many of the seaside, two-story, vacation homes in the city of Rockport were ripped to pieces.
All that damage has taken much of the steam out of the local housing market. Some owners of damaged homes have since foreclosed and put their properties on the market. And other would-be buyers are sitting on the fence because they’re worried about buying in areas that could flood again.
And it’s not just homes that were damaged: The hurricane slowed down business for the local port and gas companies, the primary economic engines for the region.
8. Anchorage, AK
Median home list price: $299,000
Price drop: -3.0%
The impact of the oil industry is easily apparent on a quick stroll through downtown Anchorage. This is a city where two of the most prominent high-rises are emblazoned with the BP and ConocoPhillips logos. In fact, the ConocoPhillips Building, at 22 stories, is the tallest building in the state.
Those close bonds with the oil business have proven to be a double-edged sword—the region (and entire state) was walloped when oil prices started to drop in 2015. Production fell, jobs were slashed, and government budgets were strained. It didn’t take long for the impact to be felt on the housing market as many workers were forced to move to other parts of the country to find work.
But there are signs that the region’s oil industry—along with its housing market—could be coming back. Last year Oil Search, a Papua New Guinea oil company, acquired a $400 million stake in an oil field in Alaska. It’s since hired workers in Anchorage.
“When oil prices go down, you hurt,” says Iverson. “When it goes up, you do well.”