The US housing market is currently experiencing an unprecedented decline in home prices, with properties in some cities selling for hundreds of thousands of dollars less than they were just a year ago.
Last week, real estate firm Redfin revealed this concerning data, marking a significant shift in the American real estate landscape following a historic surge seen during the Covid-19 pandemic.
Among the worst offenders in terms of decline by dollar amount are Oakland and San Francisco in the Bay Area. Diminishing demand and the looming possibility of a recession have contributed to the decline in these cities.
Other major metropolitan areas such as Austin, Boise, Salt Lake City, Seattle, and Los Angeles have also witnessed notable declines, with their median home prices shedding at least $60,000 since April of last year.
San Francisco and Oakland experienced significant price drops into six figures, with the median value decreasing by $220,000 and $174,000, respectively.
Redfin's report published on May 22 highlighted that "pandemic boomtowns and pricey coastal markets are seeing historic home-price declines.", MailOnline reported.
The report further revealed that the nationwide median home sale price has dropped nearly $18,000, the most significant decline since January 2012.
Research analysing more than 91 American metro areas with populations of at least 750,000 observed that this decline marked the third consecutive month of decreases following a decade of increasing prices.
The steepest declines were recorded in California markets, which are typically perceived as expensive, as well as towns that experienced a surge in demand during the pandemic.
Austin, a prime pandemic hotspot, recorded dramatic losses nearing six figures, with a decrease of $85,000 in home values since April. This amounted to a 15.3 percent decrease in equity that has essentially evaporated over the past year.
Boise, Idaho, another city affected by the decline, saw homes selling for $80,000 less than the previous year. The percentage drop of 15.1 percent mirrored the decline in Austin.
Despite both cities having average listing prices around $500,000, significantly lower than the West Coast average, they were identified as having overpriced real estate last year due to post-pandemic demand.
The historically costly locale surrounding San Francisco had the fourth-worst rate for mean sale price decline, despite its drop being the most pronounced in dollars.
Salt Lake City, which experienced a 40 percent surge in downtown activity since February 2020, had the fifth-most rapid percentage decline.
The increased demand in Salt Lake City led to higher housing prices, which are now coming back down to earth, with an average cost of $60,000 to purchase a home in the city.
Other metropolitan areas that experienced decreases in home prices according to Redfin include Seattle, Los Angeles, Philadelphia, and Washington, D.C., all of which have a cost of living well above the national average.
These areas also saw a rise in crime rates during the pandemic, which, combined with higher mortgage rates, discouraged buyers and sellers from engaging in transactions.
As a result, new listings dropped 26.1 percent year over year, the largest decline on record since April 2020 when the pandemic halted the housing market.
Homeowners are now refraining from selling their properties, hoping to hold onto their relatively low mortgage rates compared to more recent figures.
Despite the declining national average, several metropolitan areas managed to record increases in sales prices. Many of these areas were located in the Midwest, such as St. Louis, Cincinnati, and Milwaukee, which experienced price increases of 7.8 percent, 8 percent, and 8.9 percent, respectively.
