Welcome to the Top 10

Posted on March 9, 2023 by grim

From CoreLogic:

US Home Price Insights – March 2023

January 2023 National Home Prices

Home prices nationwide, including distressed sales, increased year over year by 5.5% in January 2023 compared with January 2022. On a month-over-month basis, home prices declined by 0.2% in January  2023 compared with December 2022 (revisions with public records data are standard, and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results).

Forecast Prices Nationally

The CoreLogic HPI Forecast indicates that home prices will decrease on a month-over-month basis  by 0.1% from January 2023 to February 2023 and increase on a year-over-year basis by 3.1% from January 2023 to January 2024.

Home Prices Decline in Three Western States and Washington, D.C. From January 2022

U.S. home prices continued their gradual free fall in January, with the 5.5% annual gain down for the ninth straight month and the lowest recorded since June 2020. Deceleration was particularly noticeable in the Western U.S. and other states and metro areas that saw substantial appreciation over the past few years. Three Northwestern states (along with Washington, D.C.) posted at least slight annual declines as migration patterns that began during the pandemic shifted, slowing demand and driving price decreases.

Posted in Economics, Housing Bubble, National Real Estate, New Jersey Real Estate | 110 Comments

Will we see 8?

Posted on March 8, 2023 by grim

From Mortgage News Daily:

Mortgage Rates Head Back Over 7% After Powell Testimony

Jerome Powell is the Chair of the Federal Reserve–the entity that sets overnight lending rates in an attempt to keep inflation in a low, stable range.  Inflation has been anything but low and stable recently, so the Fed has hiked overnight rates at the fastest pace in 40 years.

Mortgage rates have also risen at the fastest pace in 40 years, but they are not directly dictated by the Fed.  Rather, the Fed’s direct influence on overnight rates spills over to the rest of the rate market.  The longer the duration of any given borrowing term, the less connected the interest rate may be to the Fed Funds Rate.

Moreover, the market adjusts expectations for the Fed Funds Rate constantly whereas the Fed only officially hikes/cuts 8 times a year.  When the Fed meets again in 2 weeks, they will certainly be hiking rates again.  The only question is “by how much?” 

Markets had been steadfast in their expectations for a 0.25% hike, which is viewed as the minimum increment for a rate change from the Fed.  With some recent data indicating plenty of economic resilience and persistent inflationary pressures, calls have increased for a 0.50% hike.  

In a scheduled testimony before the Senate Banking Committee today, Fed Chair Powell stopped short of specifying a number for the next rate hike, but commented qualitatively on the need to hike faster/more than previously expected.  Markets consequently upped the odds for a bigger hike in 2 weeks as well as a higher ceiling expected by the end of 2023.

Again, the Fed Funds Rate doesn’t directly dictate mortgage rates, but there was a bit of spillover as market expectations shifted in the direction of “higher for longer.”  The average mortgage lender was already close to 7% for a top tier conventional conforming 30yr fixed scenario, and today’s weakness was enough to officially push us up into the low 7’s.

Posted in Economics, Housing Bubble, Mortgages, National Real Estate | 136 Comments

NJ Economic Outlook

Posted on March 7, 2023 by grim

From Charles Steindel at the Steve Sweeny Center for Public Policy at Rowan:

Multi-Year Budget Workgroup: New Jersey Economic Outlook

New Jersey’s economy did well in 2022, setting new highs in jobs, output, and income, generally matching or exceeding growth in neighboring states, and keeping pace with the national expansion. However, the widespread expectation is that the national economy could fall into a recession in the near future, reflecting the interest rate hikes the Federal Reserve has generated to bring down price inflation. In this environment New Jersey’s economy will face headwinds. If, as is widely expected, any recession would be relatively modest and short, New Jersey should start to recover in 2024. Nevertheless, ongoing corrections in the equity and housing markets will weigh upon many New Jersey residents and impact state revenues for some time.
…
Preliminary numbers show that the number of jobs in New Jersey hit a new record high in August 2022, and kept growing through the end of the year (the job figures for 2022 are still subject to the regular annual “benchmark” revision, which will be released in March. It is now anticipated that the current numbers are underestimates). The recovery from the pandemic collapse has been remarkable: New Jersey saw a drop in jobs in early 2020 that was notably larger than the national average, but has since experienced larger than average gains. The state’s job count grew 3.6% from December 2021 to December 2022, higher than the national gain of 3.0%, as well as New York’s 3.1%, and a touch better than Pennsylvania’s 3.5%.
…
The data on state output and income reinforce the good news we have received on the labor front. The first three quarters of 2022 saw New Jersey set new records for the dollar value of state Gross Domestic Product (GDP), and the first and third quarters set new records for “real” (inflation-adjusted) GDP. The dollar value of GDP is of particular importance since its long-term growth is, to a rough approximation, a plausible proxy for the growth of the revenue base for both state and local governments.
….
New Jersey will not be immune from a recession. At the least, the state’s huge logistics sector will be hurt by a softening in demand for goods shipped to the Port of New York and New Jersey. New York City has experienced a subpar recovery, due to ongoing softness in the financial and tourism sectors, which are vulnerable to a national downturn. Weakness in the Big Apple will have some spillovers to New Jersey, in areas such as retail sales and real estate. As mentioned, there is also some potential for a ramp-up in foreclosures. Given a mild recession we expect a modest loss of jobs in 2023, and an uptick in the unemployment rate.

The recovery from the recession is also expected to be fairly sluggish: while the Fed might bring interest rates down substantively, given the current partisan gridlock in D.C., along with concerns over the level of federal debt, there is little likelihood of much cyclical relief on the tax or spending fronts. It was a hopeful sign that numbers of major economic indicators in New Jersey actually grew better than the national average, but in looking ahead it would be better to assume that the longer-term trend of slower growth here continues.

In this environment, not only will income and spending growth slow, but so will real estate transactions (in number and dollar values), as well as capital gains realizations. All these factors will work to hold down revenues. A return to growth in 2024 will ease the situation, but as we saw in the last decade, it will take some time before revenues again grow robustly.

Posted in Demographics, Economics, Employment, New Jersey Real Estate | 90 Comments

Finally, prices fall…

Posted on March 4, 2023 by grim

From the NY Post:

US home prices just did something they haven’t done since 2012

US home prices in February posted their first year-over-year decline in more than a decade as surging mortgage rates put the squeeze on the market.

The average US home sold for $350,246 for the four weeks ending on Feb. 26, according to an analysis by real estate firm Redfin this week. The sale price plunged by 0.6% compared to the same month one year ago — the first annual decline since February 2012.

“Prices falling from a year ago is a milestone because it hasn’t happened since the housing market was recovering from the 2008 subprime mortgage crisis,” Redfin deputy chief economist Taylor Marr said in a statement.

“Home prices skyrocketed so much over the last few years that they were likely to come down once rates rose from historic lows,” Marr added.
…
The largest price declines were in “pandemic homebuying hotspots,” the firm said. 

Austin, Texas, posted the largest year-over-year decline of 11%.

Posted in Economics, Employment, Housing Bubble, Mortgages, National Real Estate | 55 Comments

Back to 7%

Posted on March 3, 2023 by grim

From CNBC:

Mortgage rates jump back over 7% as inflation fears drive yields higher

The average rate on the 30-year fixed mortgage jumped back over 7% on Thursday, rising to 7.1%, according to Mortgage News Daily.

Growing fears that inflation is not cooling off are pushing bond yields higher.Mortgage rates loosely follow the yield on the U.S. 10-year Treasury.

“Rates continue to move at the suggestion of economic data, and the data hasn’t been friendly. This is scary considering this week’s data is insignificant compared to several upcoming reports,” said Matthew Graham, chief operating officer at Mortgage News Daily.

Rates went over 7% last October. That was the highest level in more than 20 years. But they pulled back in the following months, as inflation appeared to be easing. By mid-January rates were touching 6%, spurring a big jump in buyers signing contracts on existing homes.

So-called pending home sales rose an unexpectedly strong 8% from December, according to the National Association of Realtors. But the past four weeks have been rough. Rates have moved 100 basis points higher since the start of February.

For a buyer purchasing a $400,000 home with 20% down on a 30-year fixed loan, the monthly payment, including principal and interest, is now roughly $230 a month more than it would have been a month ago. Compared with a year ago, when rates were in the 4% range, today’s monthly payment is about 50% higher.

As a result, mortgage applications from homebuyers have been falling for the past month and last week hit a 28-year low, according to the Mortgage Bankers Association.

“The recent jump in mortgage rates has led to a retreat in purchase applications, with activity down for three straight weeks,” said Bob Broeksmit, president and CEO of the Mortgage Bankers Association. “After solid gains in purchase activity to begin 2023, higher rates, ongoing inflationary pressures, and economic volatility are giving some prospective homebuyers pause about entering the housing market.”

Posted in Mortgages, National Real Estate | 77 Comments

Billion Dollar Jersey Stimulus?

Posted on March 2, 2023 by grim

From TAP:

Nearly 1.7 Million New Jerseyans Applied for the ANCHOR Property Tax Relief Program

Approximately 1.7 million New Jersey homeowners and renters applied for the first year of the State’s historic ANCHOR property tax relief program, announced Governor Phil Murphy and Treasurer Elizabeth Maher Muoio. The last day to file for the program was Feb. 28.

Of the applications, more than 1.1 million were filed by homeowners and more than 480,000 were filed by renters, who were eligible for property tax relief for the first time in a generation, said officials. 

“My Administration has once again responded to the concerns of hard-working families not by offering empty words and promises, but by delivering on the promise of affordability and real property tax relief,” said Governor Murphy. “Thanks to the historic and unprecedented ANCHOR program, almost 1.7 million more New Jerseyans are now better positioned to pursue their own American Dream, a pursuit that has been too often hindered by high costs of living and affordability constraints. As I indicated during my Budget Address yesterday, that number is merely the beginning and only motivates us to re-double our efforts to support hard-working families throughout the next fiscal year.”

To have been eligible for this year’s benefit, homeowners and renters must have occupied their primary residence on October 1, 2019, and file or be exempt from NJ income taxes. Homeowners who earned between $150,000 and $250,000 in 2019 may be eligible for a $1,000 rebate, homeowners who earned up to $150,000 in 2019 may be eligible for a $1,500 rebate, and renters who earned up to $150,000 in 2019 may be eligible for a $450 rebate.
…
Payments will be issued in the form of checks or direct deposits sent no later than May 2023 and will not be subject to State income tax.

Posted in Economics, New Jersey Real Estate, Politics, Property Taxes | 43 Comments

We’re spending more … for you!

Posted on March 1, 2023 by grim

From Politico:

Murphy outlines $53B plan for ‘Next New Jersey’ in budget speech

Gov. Phil Murphy on Tuesday outlined a $53.1 billion budget that supports what he calls the “Next New Jersey” as the state faces the prospect of a recession after recovering from the Covid-19 pandemic.

Loaded with billions to cut another round of rebate checks to taxpayers, stockpile savings and pay down debt, the spending plan is once again the biggest in state history, but does not include new taxes or fare increases for NJ Transit riders. It doesn’t include any notable new programs, either, but instead builds on the foundation the Democratic governor laid in budgets past with an eye on what he called affordability, responsibility and opportunity.

“This entire budget is purpose-built to help you find your place in the Next New Jersey by securing your place in the New Jersey of right now,” Murphy said in a roughly 50-minute speech. “Indeed, this is a budget focused on the pocketbooks of our families.”

Murphy’s annual address kicks off months of negotiations with the Democratic-led Legislature that inevitably will lead to changes and late deal-making. Last year, for example, lawmakers added millions in pet projects to Murphy’s proposed $48.9 billion budget, bringing the total to $50.6 billion when he signed it in June.

With all 120 seats in the Legislature on the ballot in November — the first election since Democrats lost several seats in a surprisingly strong Republican cycle in 2021 — it wouldn’t be surprising to see another year of padded spending to arm incumbents with arguments for reelection.

And Democrats already have one perk to show off to voters: the ANCHOR property tax rebate checks hitting mailboxes this spring. That program, first launched last year, delivers up to $1,500 to about 1.5 million homeowners and renters in an attempt to soften the blow of the state’s nation-leading property taxes.

Murphy is proposing to continue that program for another year at a cost of $2 billion.

Murphy also wants to double the state’s child tax credit from $500 to $1,000 for each child younger than five years old. And for seniors, he wants to expand the Senior Freeze property tax reimbursement program to people with incomes up to $150,000. Last year, the income limit was $100,000.

Posted in Economics, New Jersey Real Estate, Politics, Property Taxes | 65 Comments

The mighty will fall

Posted on February 28, 2023 by grim

From the NY Post:

Home prices set for double-digit plunge in major Western US cities: Goldman Sachs

Four US cities that experienced housing booms during the COVID-19 pandemic are set for major declines in home prices by the end of next year, according to Goldman Sachs analysts.

The pandemic boomtowns of Austin, Seattle, Phoenix and San Francisco will all experience double-digit price declines as an increase of available homes surpasses demand, the bank’s analysts said in a note to clients last Thursday obtained by Insider.

The largest decrease in home prices will occur in Austin, where values are projected to slump 19% by late 2024 compared to late 2022, according to the note. Prices are expected to sink in Phoenix by 16%, San Francisco by 15% and Seattle by 12%.

“Rather than being indicative of things to come across the country, we view the nascent oversupply in Pacific Coast and Southwest markets as reflecting local challenges, particularly very poor levels of affordability, pandemic-related distortions, and (in certain markets) a high concentration of employment in the technology industry,” the Goldman Sachs analysts said in the note, according to Insider.

As the analysts noted, Seattle and San Francisco are home to major tech firms — many of which, including giants such as Amazon, Google and Twitter, have conducted layoffs in response to worsening economic conditions.

On a national level, home prices are expected to plunge by 6.1% this year as the housing correction plays out, according to Goldman.

The once-red-hot US housing market has struggled over the last year during a surge in mortgage rates, which were hovering at an average of 6.5% as of last week, according to Freddie Mac. 

The steep rates have pushed many prospective homebuyers to the sidelines and forced some owners to slash their asking prices to entice demand.

Posted in Economics, Employment, Housing Bubble, Mortgages, National Real Estate | 54 Comments

But Murphy said we should be happy to pay

Posted on February 27, 2023 by grim

From Patch:

Wyckoff Rep. Sounds Alarm On ‘Exodus’ Of Jobs, People From New Jersey

Fifth District Rep. Josh Gottheimer is sounding the alarm on what he said is an “exodus” of jobs and people from New Jersey.

In his State of the District address on Feb. 15, the congressman asked the question: “Will we build on our great history, and our strengths, and the values we celebrate, or will we let other states pass us by and steal our jobs and tax dollars?”

“Will we make life more affordable,” Gottheimer continued, “or will people and businesses keep packing up to study, work and retire elsewhere?”

New Jersey, according to the U.S. Census, lost more residents (-64,231) to other states over the past year than any other state, except for California, New York and Illinois. 

Gottheimer identified the “exodus” of people and jobs to other states as one of his five key points for a “stronger, tougher” Fifth District in his State of the District address.

He said, in the address, that in order to compete with the rest of the country and help people stay in New Jersey, the state needs to make life more affordable for residents, and draw more good-paying jobs and businesses. 

Of all 50 states, New Jersey, according to the Tax Foundation, has the highest business income tax in the nation, and ranks third-worst for individual taxes, and sixth-worst for property taxes, the congressman cited. In addition, the tax structure ranks worst in the country for retirees, he said. 

“These stats aren’t exactly something you put on a recruitment bumper sticker to attract young families and retirees — or new businesses, and the jobs that come with them,” Gottheimer said. 

Posted in Demographics, Economics, Employment, New Jersey Real Estate, Politics | 35 Comments

Can’t even afford the trailer park

Posted on February 26, 2023 by grim

From the NY Post:

Inside the Hamptons trailer park that’s become a playground for millionaires

In the summer of 1998, Ken Hilderbrandt was contemplating buying a bigger boat — or a beachfront trailer on a wave-swept bluff in Montauk overlooking the Atlantic Ocean. 

“There was a [for-sale] sign on the window, rotted off,” Hilderbrandt, 85, told The Post, recalling the dilapidated trailer sitting on a 1,972-square-foot lot of land within Montauk Shores, the former seaside campsite for working-class vacationers, locals and surfers. Hilderbrandt, who owns a jet-ski rental business in Bellport, saw the potential. Sure, it was a fixer-upper off a dirt road — but the million-dollar ocean views pulled him in like a riptide. The asking price was $150,000. 

“I said, ‘That’s ridiculous.’ It was old. It needed to be gutted. I took a look inside, walked out here with him and said, ‘I’ll make you an offer — for $95,000.’ He said, ‘I want $96,500.’ So that was it,” Hilderbrandt said. He sold his boat and purchased the trailer. 

“Back then, you could rent them for $50 a month,” he said. A decade later, he tore down the trailer and erected a two-bed, two-bath modular home with a wraparound porch, marble countertops and laminate floors, investing around $100,000 in the remodel. Today, his humble 1,200-square-foot abode could command $60,000 as a three-month summer rental, enough to send one of his grandkids to college, he told The Post. He said he won’t even consider selling the property for under $5 million. 

Though it bills itself as “Montauk’s best kept secret,” 65-year-old trailer park Montauk Shores is now a shabby-chic status symbol that’s dividing the local community. Hilderbrandt may drive a reliable Honda — but you’re just as likely to spot a Mercedes SUV parked here. Deep-pocketed buyers are being lured in by its location in Ditch Plains — a surfer’s paradise spanning two miles of sandy cliffs and the most coveted waves on Long Island’s East End. This week, The Post reported that an off-market listing for an 800-square-foot oceanfront trailer located on Edgewater Drive was in contract to sell for a record-breaking $3.75 million.

Posted in Demographics, Economics, National Real Estate, Philly | 17 Comments

Liquor up

Posted on February 24, 2023 by grim

From InsiderNJ:

Governor Murphy Holds Roundtable Discussion on Modernizing New Jersey’s Antiquated Liquor Licensing Laws

Governor Phil Murphy today held a roundtable discussion where he met with stakeholders to gather input and learn from diverse perspectives for his new legislative proposal to reform and modernize New Jersey’s antiquated liquor license laws. At Clinton restaurant Pru Thai, Governor Murphy was joined by key stakeholders who voiced their support and recommendations for a new equitable, affordable framework that has the potential to generate massive economic opportunities for small businesses and communities statewide.

“Our current liquor license law is a relic of Prohibition New Jersey. We need a liquor license law for the Next New Jersey,” said Governor Murphy. “We need to face the simple reality that a liquor license is a game-changer. Current financial barriers prevent equitable access for small businesses and those in underserved communities while suppressing New Jersey’s economy. Our impending proposal will create an affordable, equitable path for the next generation of aspiring restauranteurs, brewers, distillers, and vintners, making them more competitive with small businesses in neighboring states while transforming our economies and our downtowns. Equally important, it will establish a tax credit to support existing license holders and it will maintain local control over the licensing process so that communities have a say in the future of their town.”
…

“A liquor license for our restaurant would bring in extra revenue to support us during these challenging times in the devastating aftermath of COVID,” said Korn Wongsarochana, owner of Pru Thai restaurant. “Not only would it make life easier for our customers who want to enjoy drinks to complement their meal, it would also give other small family-owned restaurants the chance to obtain a license which, up until now, has been impossible.”

“Governor Murphy’s proposal is a game changer for small restaurant owners like myself, who may finally be able to realize our dreams of owning, not just a successful restaurant, but one that is sustainable for the long-term,” said Ehren Ryan, owner of Common Lot restaurant. “This modernization of our liquor license laws will help to build an industry that supports all existing hospitality establishments and most importantly, will inspire the next generation of New Jersey-born and -bred chefs and restaurateurs who want to establish and pursue their careers in this state.”

“As license holders, my family and I know how expensive liquor licenses can be and the obstacle it creates for people like us who want to open a restaurant” said Daniel Rios, Co-Owner of Sabor y Arte Restaurant, member of the Statewide Hispanic Chamber of Commerce of New Jersey. “We believe liquor license reform will help successful businesses like ours expand into new areas and markets.”

Posted in New Development, New Jersey Real Estate | 75 Comments

You should be happy to pay NJ taxes

Posted on February 23, 2023 by grim

From Patch:

NJ Has Nation’s Highest Property Taxes, By A Long Shot: Report

Life in New Jersey tends to guarantee two things: death and high property taxes. The Garden State pays the nation’s highest rate on property taxes by a long shot, with an average bill that’s 43 percent higher than the second-leading state, according to a new report from WalletHub.

New Jersey’s effective real-estate tax rate in 2021 — the most recent year of data — was 2.47 percent, the highest in the U.S. The state also outpaced all others in terms of average annual taxes on a home of state-median value ($8,797 annually for a home valued at $355,700), WalletHub said in its report, released Monday.

That’s 43 percent higher than the state with the second-highest tax bill on a median-priced home — $6,153 per year on a $286,700 property in Connecticut.

Although it doesn’t make up the cost difference in real-estate taxes, New Jersey is one of 25 states without property taxes on vehicles. The nation’s highest vehicle property-tax rate goes to Virginia — 3.96 percent, or $1,039 for a $26,000 car.

New Jersey routinely ranks among the highest in the nation when it comes to property taxes. Average payments and home values have gone up steadily throughout the state over the past decade, regardless of what political party is in power.
…
In the past, Murphy has also defended New Jersey’s high taxes, saying they’ve helped the Garden State produce a higher standard of living than most around the country.

Posted in New Jersey Real Estate, Politics, Property Taxes | 98 Comments

Home Sales Down Again

Posted on February 22, 2023 by grim

From CNBC:

U.S. home sales post 12th straight monthly decline; house price inflation cools

U.S. existing home sales dropped to the lowest level in more than 12 years in January, but the pace of decline slowed, raising cautious optimism that the housing market slump could be close to reaching a bottom.

The report from the National Association of Realtors on Tuesday also showed the smallest increase in annual house prices since 2012, which should help to improve affordability. It will, however, be a while before the housing market turns the corner.

Mortgage rates have resumed their upward trend after robust retail sales and labor market data as well as strong monthly inflation readings raised the prospect of the Federal Reserve maintaining its interest rate hiking campaign through summer.

Existing home sales fell 0.7% to a seasonally adjusted annual rate of 4.00 million units last month, the lowest level since October 2010, when the nation was grappling with the foreclosure crisis. That marked the 12th straight monthly decline in sales, the longest such stretch since 1999.

Sales fell in the Northeast and Midwest, but rose in the South and West. Economists polled by Reuters had forecast home sales rising to a rate of 4.10 million units. Home resales, which account for the biggest share of U.S. housing sales, plunged 36.9% on a year-on-year basis in January.

Posted in Economics, Housing Bubble, National Real Estate | 102 Comments

No recession for the rich

Posted on February 21, 2023 by grim

From Mansion Global:

Manhattan’s Luxury Real Estate Market Posts Best Week Since May 2022

Last week’s unseasonably warm temperatures may have helped warm up Manhattan’s luxury residential real estate market. 

There were 31 properties priced at $4 million or more sold in the week ending Sunday, six more than the previous week, according to Monday’s report from Olshan Realty. 

Last week, 21 condos went into contract, compared to seven co-ops, the report said. There were also three condops in the mix, but no townhouses changed hands. The total sales volume for the week was $272.22 million. 

“It was the largest weekly total since May 9-15, 2022, when 39 contracts were signed,” Donna Olshan, president of Olshan Realty, said in the report. “And for the second week in a row, a co-op took the top spot.”
…
As it happened, that No. 1 spot went to a 27th floor unit at Hampshire House on Central Park South asking $30 million, according to the report. The approximately 6,500-square-foot residence sold in less than two weeks, offering a great room with 18-foot ceilings and 15-foot arched doorways that open to a terrace with Central Park views. There are also seven bedrooms, five bathrooms and two powder rooms. Building amenities include laundry service, safety deposit boxes and a health club, plus a doorman, bell captain and concierge. 
…
Last week’s No. 2 deal was a downtown penthouse on Park Place that was priced at $19.75 million, down from its original ask of $21.75 million when it was listed in June, according to Olshan. The nearly 4,000-square-foot unit—with four bedrooms and four-and-a-half bathrooms—has a corner living room adjacent to a formal dining room and both with sweeping city views that reach from the Hudson River to the East River. It also boasts 12-foot ceilings and two 93-square-foot terraces.

Posted in Demographics, Economics, NYC | 113 Comments

Slow (not) down

Posted on February 19, 2023 by grim

From CNN:

Here are the US cities where home prices are actually falling

Home prices are going up across the country — in aggregate. Looking at individual markets, however, some are showing prices have fallen from a year ago.

Single-family median home prices increased 4% in the fourth quarter from a year ago to $378,700. Prices were strongest in the Northeast in the last quarter, up 5.3%; followed by the South, up 4.9%; the Midwest, up 4% and the West, up 2.6%, according to the National Association of Realtors.

But drill down to the market level and it’s clear that prices in some areas are declining from the prior year. The positive regional numbers mask that about 11% of individual housing markets tracked by NAR — 20 of 186 cities — experienced home price declines in the fourth quarter of last year. 

“A few markets may see double-digit price drops, especially some of the more expensive parts of the country, which have also seen weaker employment and higher instances of residents moving to other areas,” said Lawrence Yun, NAR’s chief economist.

Nearly all of the most expensive places to buy are in the West and half of the 10 most expensive cities are in California. Several of those places are seeing prices fall the most.
…

Among the most expensive cities that saw prices falling are Anaheim, California, with the median price of $1,132,000, down 1.6% from a year ago; Los Angeles, with the median price of $829,100, down 1.3%; and Boulder, Colorado, with the median price of $759,500, down 2.0%.

Other places with falling prices saw the big price increases during the frenzied home buying market of the past few years. They also tend to be appealing lifestyle destinations where people moved to as remote work provided more flexibility. These include Boise, Idaho, where prices fell 3.4% from a year ago and Austin, Texas, where prices are down 1.3%.

The good news for buyers looking for price relief is that the 4% median price hike in the fourth quarter is less than the 8.6% increase in the third quarter. In addition, the price increases are smaller, with far fewer markets experiencing double-digit price gains in the fourth quarter.

“A slowdown in home prices is underway and welcomed, particularly as the typical home price has risen 42% in the past three years,” said Yun, noting these cost increases have far surpassed wage increases and consumer price inflation since 2019.

Posted in Economics, Housing Bubble, National Real Estate, Price Reduced | 53 Comments