Redfin reports largest in decade national home price drop of 3.3 percent; Sacramento decreases 11.9 percent
Federal Reserve’s higher interest rates causing drops
In a sign of the effects of the Federal Reserve’s higher interest rates, Seattle-based Refin has reported home prices nationally dropped 3.3 percent in March. That drop represents the largest annual decrease since 2012.
While the price drop was on a national basis, some of the pandemic boom towns that saw an influx had the most significant drops including Sacramento.
Boise, ID, saw prices fall 15.4 percent from a year earlier, more than any other U.S. metro area Redfin analyzed. followed by Austin, TX, which fell 13.7 percent.
Redfin analysis shows that Sacramento prices decreased 11.9 percent, San Jose 10.5 percent, and Oakland dropped 9.7 percent. Boise also saw the largest drop in pending home sales, with a 78.8 percent year-over-year decline, while pending sales nationally dropped 26.6 percent.
“I was consistently busy in the fall, but things got really quiet in March after the collapse of Silicon Valley Bank,” Boise Redfin real estate agent Shauna Pendleton said. “That killed the buyer momentum that had been building and brought us right back to where we were last year when mortgage rates shot up.”
The Redfin reports noted, “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 percent 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 percent the same month. Redfin’s records date back to 2012.”
While low-interest rates and the pandemic quickly escalated prices in several markets, markets that didn’t hear are fairing better. And prices rose more than 10 percent year-over-year in March in Milwaukee, El Paso, TX, Omaha, NE, Camden, NJ, and Knoxville, TN—the biggest gainers in the country.
“This year’s spring homebuying season is lackluster,” Redfin Chief Economist Daryl Fairweather said. “There are some signs of the typical seasonal uptick—homes are selling faster than they were in the winter—but that’s partly because there are so few new listings. Normally we see homebuyers come out in throngs at this time of year, which isn’t happening.”
Photo by Thirdman.
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