According to Realtor.com®'s annual analysis, autumn is often the best time to buy a home.
To be clear, the autumn market will continue to be tough for buyers and sellers. Mortgage rates are above 7%, and high interest rates are exacerbating the home inventory crisis as fewer sellers list their properties for sale. The lack of homes for sale has pushed up home prices in much of the country.
According to Realtor.com, prices per square foot rose in 133 of the 150 largest real estate markets in August.
Still, there are some markets where prices are falling, and Realtor.com's data team found that homebuyers can afford to pay less than they did last year in those places, as well as those where prices are climbing the fastest.
To arrive at the rankings, we looked at the change in median list price per square foot in August 2023 compared to August 2022 for the 50 largest metro areas. To ensure geographic diversity, we included only one metro area per state.
We learned that most of the real estate markets with the biggest price declines since last year were places that stood out during the wave of home price increases in the COVID era of the 19th century. Meanwhile, the most affordable areas of the country - markets where home prices haven't spiked dramatically - are now seeing the biggest home price gains.
Of the areas where home prices are still falling on a per-square-foot basis, many have pulled back after huge home price gains over the past few years," said Danielle Hale, chief economist at Realtor.com.
Areas with the biggest home price declines:
Myrtle Beach, SC (-2.9)
Las Vegas, Nevada (-2.7)
Stockton, CA (-2.1)
Austin, Texas (-2)
Phoenix, AZ (-1.2)
Ogden, UT (-1.1%)
Boise, IN (-1.1%)
Lakeland, FL (-0.9%)
Honolulu, OH (-0.5%)
Jackson, MI (-0.1%)
The market with the largest year-over-year decline in home prices in August was Myrtle Beach, South Carolina. A sprawling resort area popular with retirees, young families, and those relocating from colder, more costly areas of the Northeast, the city saw a 2.9% year-over-year decline in home prices in August, with the median list price falling to $355,784.
A number of other places on the list - including Phoenix, where prices per square foot fell 1.2 percent, and Las Vegas, where they fell 2.7 percent - have had turbulent histories. Both cities were among the markets that lost the most home values when the housing market crashed in 2008. Home prices in these areas have proven to be volatile, with prices rising sharply during the pandemic and now leading the way down again.
Many of these areas, while priced high compared to the median home in the U.S., actually compare favourably to real estate in major California markets," Hale said. This has made them a top destination for homebuyers over the past few years."
Areas with the biggest home price increases:
Naples, FL (+17.1)
Albany, NY (+16.9%)
Fort Wayne, IN (+15.7)
Toledo, OH (+15.6)
Manchester, NH (+15%)
Portland, MI (+14.7%)
Reading, PA (+14.3%)
Boston, MA (+13.1%)
Savannah, GA (+12.8%)
Trenton, NJ (+12.4%)
The places where home prices have increased the most over the past year are also the places where home prices have traditionally been the most affordable. This suggests that housing affordability is waning.
Typically, the areas with the largest home price gains have been affordable Northeast or Midwest markets, where home prices are typically below the U.S. median, Hale said.
In markets such as Fort Wayne, Indiana (No. 3), and Toledo, Ohio (No. 4), median list prices of $329,400 and $237,200, respectively, are well below the August 2023 national median of $435,400. However, these affordable homes also topped our list in terms of price increases over the past year.
The Manchester, NH market (including nearby Nashua, NH) perennially ranks in the top three of Realtor.com's monthly Hottest Markets list. Over the years, Manchester has consistently ranked high in several of our analyses of ongoing demand and price increases. The area is high compared to the national median, which is $557,2000, but is still much more affordable than some of the nearby population centres, such as Boston, where the median is $844,200.
If there's any pattern to the current market, it's that affordability is slipping, and that's mostly happening in places where there's still some affordability. One exception is Naples, Florida, where the median home price was $845,013 in August.
Hurricane Ian in September 2022 and Hurricane Idalia in 2023 could have an impact on home price trends, Hale says.
These natural disasters can cause home prices to plummet and then rebound. Or it could be that buyers are just discovering Naples.
Dolly Lenz is the CEO and founder of Dolly Lenz Real Estate, which has offices in New York and Florida.
"Then we discovered Naples. It wasn't as crowded or flashy. But it was pristine. The area was beautiful. Everything was neatly manicured. It's a safe neighbourhood. And there's a lot of good food here, so it makes sense that people, especially New Yorkers, would discover this area."