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 10 U.S. Metro Areas With the Highest Rate of Home Price Reductions
August 9, 2022

10 U.S. Metro Areas With the Highest Rate of Home Price Reductions

by The CE Shop Team

As the Housing Market Cools, Some Sellers Have Been Forced to Slash Home Prices 

For more than two years, we've been living in an extremely competitive seller’s market marked by soaring home prices and ultra-low inventory. But things might finally be starting to change. 

In recent months, there have been signs that the housing market has begun to slow down amid rising mortgage rates. That’s led some sellers to slash prices on their homes, a new Realtor.com analysis shows

The analysis shows which U.S. cities have seen the highest rate of price reductions. Spoiler alert: Many are cities that have attracted out-of-town buyers in recent years as prices surge. Is your city on the list? Let’s dive in. 

The Housing Market Appears to Be Slowing 

Until recently, the record-breaking, ultra-hot housing market has left some prospective homebuyers frustrated as they struggle to buy a home. But now, as mortgage rates rise and the housing market cools, buyers might be regaining some leverage. 

Would-be buyers have grown more hesitant to enter the housing market “due to record-high and still-rising home prices coupled with higher mortgage rates pummeling their inflation-battered budgets,” Realtor.com reported. “Fears of another recession, stock market drops, and a growing sense of ennui over the state of the world are also sidelining buyers.” 

That’s in contrast to earlier this year, when buyers were often paying well over a home’s asking price and waiving contingencies. Buyers’ hesitance has forced sellers across the country to begin reducing prices. 

“With buyers pulling back, homes linger for a longer time on the market and more homeowners have to slash prices to get a deal done,” says Realtor.com Senior Economist George Ratiu. 

There have been plenty of other signs that the housing market is cooling. 

In June, for example, U.S. homebuyers canceled contracts at the highest rate since the start of the COVID-19 pandemic. While some homebuyers are backing out of deals because they’ve realized that the slowing housing market could allow them to negotiate, others are being forced to cancel contracts because rising mortgage rates mean they can no longer afford the home, a Redfin report says. 

While home prices aren’t expected to plummet like they did during the Great Recession, experts say that in many parts of the country, buyers will likely get a little bit of relief from the competitive market. 

10 Metro Areas With Highest Rate of Price Reductions 

To determine which cities had the highest rate of price reductions, Realtor.com analyzed June housing data from the country’s 200 largest metropolitan areas. These 10 metro areas are “where sellers are pricing their properties the most out of step with what buyers are willing to pay for them — and where buyers might be able to negotiate a better deal." 

  1. Reno, Nevada 

    Median list price: $677,500 

    Percentage of listings with price reductions: 32.6% 
     
  2. Austin, Texas 

    Median list price: $620,000 

    Percentage of listings with price reductions: 32.4% 
     
  3. Phoenix, Arizona 

    Median list price: $548,500 

    Percentage of listings with price reductions: 29.5% 
     
  4. Anchorage, Alaska 

    Median list price: $436,000 

    Percentage of listings with price reductions: 28.5% 
     
  5. Boise, Idaho 

    Median list price: $587,900 

    Percentage of listings with price reductions: 27.4% 
     
  6. Ogden, Utah 

    Median list price: $580,100 

    Percentage of listings with price reductions: 27.4%  
     
  7. Sacramento, California 

    Median list price: $642,500 

    Percentage of listings with price reductions: 25.2% 
     
  8. Colorado Springs, Colorado 

    Median list price: $550,000 

    Percentage of listings with price reductions: 25.1% 
     
  9. Evansville, Indiana 

    Median list price: $246,000 

    Percentage of listings with price reductions: 24.7% 
     
  10. Medford, Oregon 

    Median list price: $562,500 

    Percentage of listings with price reductions: 23.2% 
     

Eight of these 10 metro areas “experienced higher appreciation during the COVID-19 pandemic through today (March 2020–June 2022) than the national 26.2% rise over the same period,” Realtor.com reported. The only two that didn’t are Colorado Springs and Sacramento.  

“Price cuts are hitting hardest in markets which have been on a hot streak during the pandemic — cities which saw an influx of buyers looking for quality of life, more space, and affordability,” Ratiu said. “These are also markets which experienced a fast ramp-up in prices due to the inadequate supply of housing.” 

In the coming months, more and more cities could see this level of price cuts, Realtor.com predicts. 

“As the number of homes for sale grows, we can expect price reductions to become the norm, especially in high-cost areas,” Ratiu said. “For buyers, the change points to more opportunities in the months ahead, especially the fall and winter.” 

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