{"id":174973,"date":"2023-04-19T15:47:06","date_gmt":"2023-04-19T22:47:06","guid":{"rendered":"https:\/\/inbusinessphx.com\/?p=174973"},"modified":"2023-04-19T15:47:06","modified_gmt":"2023-04-19T22:47:06","slug":"home-prices-fell-3-in-march-biggest-annual-drop-in-over-a-decade-competition-up","status":"publish","type":"post","link":"https:\/\/staging.inbusinessphx.com\/?p=174973","title":{"rendered":"Home Prices Fell 3% in March\u2013Biggest Annual Drop in Over a Decade, Competition Up"},"content":{"rendered":"

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The median U.S. home price fell 3.3% in March to $400,528, the largest year-over-year drop since 2012, according to a new report<\/a> from Redfin<\/a>, the technology-powered real estate brokerage.<\/p>\n

Pandemic boomtowns and pricey Bay Area markets led the price declines in March. In Boise, ID, prices fell 15.4% from a year earlier, more than any other U.S. metro area Redfin analyzed. Next came Austin, TX (-13.7%), Sacramento, CA (-11.9%), San Jose, CA (-10.5%) and Oakland, CA (-9.7%). Boise also saw the largest drop in pending home sales, with a 78.8% year-over-year decline. Nationwide, pending sales fell 26.6% on a seasonally-adjusted basis to the lowest level since the onset of the pandemic (April 2020).<\/p>\n

\u201cI was consistently busy in the fall, but things got really quiet in March after the collapse of Silicon Valley Bank,\u201d said Boise Redfin real estate agent Shauna Pendleton. \u201cThat killed the buyer momentum that had been building and brought us right back to where we were last year when mortgage rates shot up. There\u2019s this fear that everything will crash. There are bank failures, inflation, recession fears, mortgage-rate volatility, a war in Ukraine, spy balloons\u2014some people are wondering if they should pull their money out of the bank and park it in a safe rather than spend it on a new home.\u201d<\/p>\n

Pendleton continued: \u201cThe irony is that it\u2019s actually a pretty good time to buy in Boise. The dropoff in homebuyer demand means that prices are falling and many sellers\u2014especially homebuilders\u2014are offering concessions. It\u2019s not uncommon for a buyer to get a home for less than the list price.\u201d<\/p>\n

Pandemic boomtowns and expensive coastal markets are seeing their housing markets slow quickly because home prices overheated in recent years and are now coming back down to earth after many buyers were priced out. Prices in Boise, for example, surged a record 40.9% in May 2021 as low mortgage rates, remote work and relatively affordable housing brought in scores of homebuyers from more expensive parts of the country. That compares with a national record increase of 26% the same month. Redfin\u2019s records date back to 2012.<\/p>\n

In Las Vegas<\/a>, 26.5% of home offers written by Redfin agents faced competition, down from 74.8% a year earlier. That 48.4-percentage-point decline is the largest decline among the metros Redfin analyzed. Next came Olympia, WA<\/a> (-40.7 ppts), Colorado Springs, CO<\/a> (-40.4 ppts), San Antonio<\/a> (-36.7 ppts) and Phoenix<\/a> (-33.9 ppts)<\/strong>. Competition rose in just one metro Redfin analyzed: Worcester, MA<\/a> (4.5 ppts). It fell the least in Washington, D.C.<\/a> (-4.1 ppts) Detroit<\/a> (-5.6 ppts), Atlanta<\/a> (-5.8 ppts) and Baltimore<\/a> (-7.2 ppts).<\/p>\n

Markets that didn\u2019t heat up as much in recent years are holding up relatively well. Pending sales fell the least<\/i> in Fort Worth, TX, Dallas, Indianapolis, Cincinnati, and Buffalo, NY. And prices rose<\/i> more than 10% year over year in March in Milwaukee, El Paso, TX, Omaha, NE, Camden, NJ and Knoxville, TN\u2014the biggest gainers in the country. When nationwide price growth hit a record 26% in May 2021, Milwaukee prices were up just 12.5%\u2014meaning they had less room to fall.<\/p>\n

In Nashville, the housing market has slowed from its pandemic peak, but demand is stable, according to local Redfin real estate agent Jennifer Bowers. Prices are up about 1% from a year ago and pending sales are down slightly less than the country as a whole.<\/p>\n

\u201cNashville\u2019s housing market is steady,\u201d Bowers said. \u201cWe\u2019re still seeing a lot of folks move in from Chicago, Texas, California and Colorado\u2014places people haven\u2019t historically come to Nashville from. Some are moving in for political reasons, some for our low taxes, and many for our relatively affordable home prices. Prices are high in the eyes of many locals, but we\u2019re still pretty affordable compared to a lot of parts of the country. We also have a solid job market and a lot of newly-built houses coming on the market, which is supporting home sales.\u201d<\/p>\n

There Aren’t Enough Homes for Sale Even Though Fewer People Are Buying<\/b><\/p>\n

Elevated mortgage rates are prompting both buyers and sellers to stay put. New listings fell 23.3% year over year in March to the lowest level on record aside from the start of the pandemic on a seasonally-adjusted basis.<\/p>\n

Many homeowners are hesitant to sell because moving would mean taking on a higher mortgage rate when they buy their next home. The average 30-year-fixed mortgage rate was 6.54% in March, up from 4.17% a year earlier. Others are staying put because they already bought their dream home in recent years or fear they won\u2019t be able to find another home they like given the shortage of listings.<\/p>\n

A lack of homes on the market is contributing to the decline in sales, preventing home prices from falling further and leading to bidding wars in some markets. More than two of every five (44.3%) home offers written by Redfin agents faced competition in March. The bidding-war rate has hovered around that level for the past five months following nearly a year of month-over-month declines.<\/p>\n

\u201cLow inventory is driving the market and causing bidding wars to intensify. I have two listings that have each received around 10 offers in the past few weeks,\u201d said Dan Close, a Redfin real estate agent in Chicago. \u201cBuyers\u2019 agents are trying so hard to find homes for their clients that they\u2019re calling me before my listings even hit the market. I did a consult with a seller recently and before we had anything in ink, three brokers phoned to say they\u2019d heard about the home through word of mouth and wanted to know more. We had two above-asking offers on the $2 million home within 24 hours. There weren\u2019t even any photos online yet.\u201d<\/p>\n

\u201cOne of my sellers recently got multiple offers on their home, but pulled the listing off the market when they found out their interest rate was going to double,\u201d said Bowers, the Nashville agent. \u201cThere are a lot of homeowners who don\u2019t want to give up their 2.5% or 3% rate for a 6.5% rate. Both buyers and sellers are having a tough time adjusting because rates are swinging up and down so quickly.\u201d<\/p>\n

Roughly 55,000 home-purchase agreements were canceled in March, equal to 14.8% of homes that went under contract. That\u2019s down from the 2022 peak of 16.8% in October, but up from 11.2% a year earlier.<\/p>\n

\u201cThis year\u2019s spring homebuying season is lackluster,\u201d said Redfin Chief Economist Daryl Fairweather. \u201cThere are some signs of the typical seasonal uptick\u2014homes are selling faster than they were in the winter\u2014but that\u2019s partly because there are so few new listings. Normally we see homebuyers come out in throngs at this time of year, which isn\u2019t happening.\u201d<\/p>\n

View the full report, including charts, here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

The median U.S. home price fell 3.3% in March to $400,528, the largest year-over-year drop since 2012, according to a new report from Redfin, the technology-powered real estate brokerage. Pandemic boomtowns and pricey Bay Area markets led the price declines in March. In Boise, ID, prices fell 15.4% from a year earlier, more than any […]<\/p>\n","protected":false},"author":2,"featured_media":174974,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_eb_attr":"","footnotes":""},"categories":[6],"tags":[3],"class_list":["post-174973","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy-trends","tag-top-stories"],"_links":{"self":[{"href":"https:\/\/staging.inbusinessphx.com\/index.php?rest_route=\/wp\/v2\/posts\/174973","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/staging.inbusinessphx.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.inbusinessphx.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.inbusinessphx.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.inbusinessphx.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=174973"}],"version-history":[{"count":0,"href":"https:\/\/staging.inbusinessphx.com\/index.php?rest_route=\/wp\/v2\/posts\/174973\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/staging.inbusinessphx.com\/index.php?rest_route=\/"}],"wp:attachment":[{"href":"https:\/\/staging.inbusinessphx.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=174973"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.inbusinessphx.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=174973"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.inbusinessphx.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=174973"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}