The cooldown of the U.S. housing market has been evident for several months now, a trend driven by rising mortgage rates that have moderately slowed demand for homes in many parts of the country.
Throughout the COVID-19 pandemic, the Florida real estate market has often been held up as a clear case of overinflated prices. Many of the state’s cities became magnets for out-of-towners who could work remotely and had incomes to drive up competition for properties, whether to live in them or to invest.
Redfin this week released the latest data on which U.S. housing markets have been cooling down the fastest in 2022. Unsurprisingly, four Florida cities cracked the top 20.
North Port, in Sarasota, came in highest at No. 9 with a median sale price of $450,000. Jacksonville was No. 17 with a median sale price of $365,000, Tampa was No. 18 with a median of $377,000 and Orlando was No. 19 with a median of $391,778.
The ranking is based on year-over-year changes in prices, price drops, supply, pending sales, sale-to-list ratio and the share of homes that went off market in two weeks from February to August. That’s when the housing market reached a peak in terms of demand and competition while the number of homes for sale was at a low, Redfin explained.
“These are all places where homebuyers are feeling the sting of rising home prices, higher mortgage rates and inflation very sharply,” said Redfin Chief Economist Daryl Fairweather. “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.”
The top five cities on the list are Seattle, Las Vegas, San Jose, San Diego and Sacramento. North Port is the only East Coast market in the top 10. Apart from the Florida cities, Raleigh, North Carolina is the only other East Coast city in the top 20.
Conversely, Redfin found that the housing market in Lake County, Illinois had been impacted the least by the wider economic picture. Albany, New Haven, Chicago and Milwaukee also were among the most stable markets in an otherwise cooling landscape.
The markets that have seen less cooling are considered more affordable, even though they recorded price increases during the pandemic.
“They’re slow to feel the impacts of economic headwinds like inflation and the Fed raising interest rates because the relatively affordable home prices make them attractive to house hunters seeking deals, and homes are already priced low enough that there’s not much room to fall,” Redfin senior economist Sheharyar Bokhari said.
In South Florida, median home sale prices in Miami-Dade County fell to $551,250 for a single-family home in August, down from $570,000 in July, the Miami Herald reported. That’s the second consecutive month they’ve fallen, while in Broward County the median sale price fell from $600,000 in July to $562,500 in August.
“Prices never go up forever,” Ana Bozovic, founder and real estate market analyst at Analytics Miami, told the newspaper. “The steady ramp up we have had through mid-2022 was neither normal nor sustainable.”
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