The residential real estate market is slowly shaking off the cobwebs of a sluggish year of buying and selling, and quick-thinking buyers have a good chance of snapping up a property for less than in 2024—if they know where to look. ask for
In more than half of the 50 largest U.S. metros, median list prices have fallen year over year — with San Francisco leading the way with a 10.87% decline, according to the December Housing Market Report Realtor.com®.
Nationwide, the median list price fell 1.8% year-over-year to $402,502 last month, even as the price per square foot rose 1.3% over the same time, indicating a glut of homes smallest and most affordable in the market. .
Mortgage rates are at a six-month high, climbing to 6.93% for the average 30-year fixed home loan for the week ending Jan. 9, according to Freddie Mac. But Realtor.com 2025 projects housing projects that mortgage rates will average 6.3% throughout 2025.
And there’s more good news for potential homebuyers: List prices are falling in major U.S. markets.
More homes for sale means lower prices
In the South and West, inventory last year nearly approached pre-COVID-19 levels, and list prices are now finally starting to reflect the abundance of options on the market.
“Austin, Denver, Phoenix and Nashville were the hottest markets of 2021 and 2022 and the places where prices went wild,” says Realtor.com Senior Economist Joel Berner. “Now, with more homes on the market, prices are coming back to where they belong.”
The number of active listings nationwide increased in December, with 22% more homes for sale year-over-year. New listings in the South and West were also up, up 4.8% and 2%, respectively.
San Francisco is struggling
San Francisco, a world-renowned tech hub filled with affluent groups, has earned itself a reputation as a very expensive city boasting a cost of living 70% higher than the national average.
But the popular West Coast destination is not without its problems, including widespread homelessness, an opioid epidemic and a shrinking business community — and now it appears those issues are starting to affect the city’s real estate market.
The median list price in the city is now at $889,499 – a whopping 10.87% drop.
Berner says the decline in San Francisco’s median list price can be explained in part by looking at the city’s growing socioeconomic problems, “with companies leaving the region and affordability being particularly challenging.”
The city’s new mayor, Daniel Lurie, a nonprofit executive and heir to the Levi Strauss family fortune, was sworn into office Wednesday. He previously said he would declare a drug emergency on his first day in office.
He has also promised to ease the city’s housing prices and pledged to build “enough housing so our neighbors can afford to live here”.
Florida post-pandemic reality check
Florida real estate markets, including metros Miami, Orlando and Jacksonville, had gotten a lot of attention in the post-pandemic boom, but are now “cooling off significantly” as inventory returns to pre-pandemic levels, Berner says.
Miami alone saw a nearly 10% drop in median list price, down to $522,499.
Another factor contributing to the downward trend in median list prices in some parts of the Sunshine State is a significant increase in new construction, particularly smaller, more cost-effective homes.
Below is a list of the top 10 cities where prices are falling rapidly:
San Francisco, CA
Median list price: $889,499
Percentage change from year to year: -10.87%
Miami, FL
Median list price: $522,499
Year-on-year percentage change: -9.9%
Austin, Texas
Median list price: $498,500
Percentage change from year to year: -7.68%
Kansas City, MO
Median list price: $369,995
Percentage change from year to year: -7.48%
Tampa, FL
Median list price: $395,000
Year-over-year percentage change: -5.95%
Jacksonville, FL
Median list price: $384,500
Year-on-year percentage change: -5.69%
Denver, CO
Median list price: $577,350
Year-on-year percentage change: -5.35%
Phoenix, AZ
Median list price: $499,995
Percentage change from year to year: -5.07%
Cincinnati, OH
Median list price: $319,050
Percentage change from year to year: -4.76%
Orlando, FL
Median list price: $419,950
Percentage change from year to year: -4.34%
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