Story at a glance
- An analysis from the real estate firm Redfin ranked the nation’s 100 most populous metros along numerous metrics, including prices, price drops and supply, between February and August 2022 to measure how fast their housing markets are cooling.
- The fastest-cooling market is in Seattle.
- In Seattle, close to 34 percent fewer homes sold within two weeks in August than a year before, while the average home sold for 5 percent more per square foot in August than a year earlier.
The real estate market is cooling fastest primarily among West Coast cities already hit by the lingering affordability crisis, with Seattle leading the way, according to a new analysis.
An analysis from the real estate firm Redfin ranked the nation’s 100 most populous metros along numerous metrics, including prices, price drops and supply, between February and August 2022 to measure how fast their housing markets are cooling.
“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 media release.
“The good news is that the slowdown is dampening competition and giving those who can still afford to buy more negotiating power,” Fairweather added.
In Seattle, close to 34 percent fewer homes sold within two weeks in August than a year before, while the average home sold for 5 percent more per square foot in August than a year earlier. This is compared with a 23 percent year-over-year increase in February, according to the analysis.
Surging mortgage rates, which rose above 6 percent this month, have also contributed to Seattle’s rapidly cooling market. According to Redfin, a monthly mortgage payment on the median-priced home in Seattle is more than $4,400 with today’s 6 percent mortgage rates — up from $3,300 earlier this year.
The Federal Reserve on Wednesday raised its baseline interest rate — the fifth time since March. This could make homebuying pricier.
Seattle was followed in the rankings by Las Vegas, where the price per square foot (PPSF) fell by 14.5 percentage points year over year. The median sale price in Las Vegas in August stood at $416,000, marking a 3 percent drop from July.
“The housing market has changed very quickly in buyers’ favor,” said Las Vegas Redfin agent Tzahi Arbeli. “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.
The real estate company noted that some of the fastest-cooling markets, like Las Vegas and Sacramento, became relocation hotspots where remote workers moved to escape more expensive markets. This caused home prices to rise drastically.
Three California cities — San Jose, San Diego and Sacramento — round out Redfin’s top five fastest cooling housing markets.
The typical home price in Sacramento increased by 33 percent since the beginning of the pandemic, from $430,000 to $570,000.
Here are the 10 fastest-cooling housing markets in the US
2. Las Vegas
3. San Jose
4. San Diego
5. Tie: Sacramento and Denver
9. Northport, Fl.
10. Tacoma, Wash.