{"id":145072,"date":"2022-10-07T13:44:56","date_gmt":"2022-10-07T19:44:56","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=145072"},"modified":"2023-08-08T15:40:01","modified_gmt":"2023-08-08T21:40:01","slug":"these-housing-markets-are-cooling-the-fastest","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/these-housing-markets-are-cooling-the-fastest","title":{"rendered":"These 20 Housing Markets Are Cooling the Fastest, According to Redfin"},"content":{"rendered":"\n\n      <iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm?e=BIGPOC7107047440&#038;light=false\" width=\"100%\"><\/iframe>  \n\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">According to the latest data from&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.redfin.com\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Redfin<\/span><\/a><span data-preserver-spaces=\"true\">, the housing market is slowing down in several major U.S. metros. The report included the top 20 U.S. hotspots and ranked them according to the number of home sales, home prices, supply and demand ratio, and the time it took for a listing to go to pending sale status.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">After two years of record-breaking data, the newest report shows a stark change of direction for many major U.S. housing markets. Notably, the cities that led the pandemic-fueled homebuying frenzy are increasingly less attractive to homebuyers put off by the high home prices that are now coupled with rapidly rising mortgage rates.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">The latest data and news coverage swirling around the&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/the-fed-wants-a-housing-correction\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">housing correction<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;has caused a lot of concern amongst real estate investors, and rightfully so. The question is: how should you react to this?<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">The West Coast Is Slowing Down<\/span> The Fastest<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">The most obvious takeaway is the cool-off in popular west coast housing markets. Seattle, in particular, is experiencing the most dramatic downturn, with home sales down 34% year-over-year as of August. It\u2019s a marked contrast with the 23% increase in the number of home sales in the city, which came as recently as February 2022, going to show how quickly things have changed.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Seattle is not an isolated example, either. Several major cities in California are experiencing a similar drop-off in buyer demand and, thus, home prices. Sacramento, San Jose, San Francisco, and San Diego are all seeing double-digit percentage decreases in home prices.&nbsp;<\/span>Below are the 20 markets that are experiencing the fastest cool-offs, according to Redfin.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1764\" height=\"1328\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/10\/Screen-Shot-2022-10-07-at-2.27.58-PM.png\" alt=\"redfin&#039;s 20 fastest cooling markets\" class=\"wp-image-145073\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/10\/Screen-Shot-2022-10-07-at-2.27.58-PM.png 1764w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/10\/Screen-Shot-2022-10-07-at-2.27.58-PM-300x226.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/10\/Screen-Shot-2022-10-07-at-2.27.58-PM-1024x771.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/10\/Screen-Shot-2022-10-07-at-2.27.58-PM-768x578.png 768w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/10\/Screen-Shot-2022-10-07-at-2.27.58-PM-1536x1156.png 1536w\" sizes=\"auto, (max-width: 1764px) 100vw, 1764px\" \/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">The west coast has had a problem with increasing unaffordability for a long time, and the pandemic merely exacerbated an existing trend. It\u2019s unsurprising that buyers are already feeling the squeeze from high home prices and are now reconsidering buying in these areas, especially since the typical mortgage interest rate is almost double what it was at the beginning of the year.&nbsp; &nbsp; &nbsp; &nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">According to Redfin Chief Economist&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.redfin.com\/news\/author\/darylfairweather\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Daryl Fairweather<\/span><\/a><span data-preserver-spaces=\"true\">, \u201cThese are all places where homebuyers are feeling the sting of rising home prices, higher mortgage rates, and inflation very sharply. They\u2019re slowing down partly because so many people have been priced out and partly because last year\u2019s record-low rates made them unsustainably hot.\u201d<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Similar effects are observable in areas that became popular pandemic relocation hotspots, notably Las Vegas, Nevada, and Phoenix, Arizona. These markets consistently made headlines over the last few years as the best cities for professionals migrating from the expensive markets of California. This year, however, they are experiencing the same issues. Housing markets in these metros became overpriced fast, and there are plenty of indications that buyers no longer see these destinations as attractive alternatives to overheated, overpriced coastal markets.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Las Vegas, for instance, peaked at $440,000 in median home prices this summer, up from $289,000 in February 2020. The median home price has since fallen sharply to $405,000.<\/span><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1244\" height=\"746\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/10\/Screen-Shot-2022-10-07-at-12.00.24-PM.png\" alt=\"las vegas real estate stats\" class=\"wp-image-145074\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/10\/Screen-Shot-2022-10-07-at-12.00.24-PM.png 1244w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/10\/Screen-Shot-2022-10-07-at-12.00.24-PM-300x180.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/10\/Screen-Shot-2022-10-07-at-12.00.24-PM-1024x614.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/10\/Screen-Shot-2022-10-07-at-12.00.24-PM-768x461.png 768w\" sizes=\"auto, (max-width: 1244px) 100vw, 1244px\" \/><figcaption class=\"wp-element-caption\"><em>Las Vegas Median Sales Price &#8211; Redfin<\/em><\/figcaption><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">On the other hand, Phoenix peaked at $469,000 in May and has since fallen to $430,000. In February 2020, the median home price was $279,000.<\/span><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1241\" height=\"746\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/10\/Screen-Shot-2022-10-07-at-12.00.42-PM.png\" alt=\"phoenix housing market stats\" class=\"wp-image-145075\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/10\/Screen-Shot-2022-10-07-at-12.00.42-PM.png 1241w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/10\/Screen-Shot-2022-10-07-at-12.00.42-PM-300x180.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/10\/Screen-Shot-2022-10-07-at-12.00.42-PM-1024x616.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/10\/Screen-Shot-2022-10-07-at-12.00.42-PM-768x462.png 768w\" sizes=\"auto, (max-width: 1241px) 100vw, 1241px\" \/><figcaption class=\"wp-element-caption\"><em>Phoenix Median Sales Price &#8211; Redfin<\/em><\/figcaption><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Does It Make Sense To Invest Right Now?<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">There\u2019s no denying that with the housing market cooling off, investing requires a more cautious and calculated approach. According to&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.bloomberg.com\/news\/articles\/2022-08-12\/housing-slowdown-chills-investors-who-supercharged-us-market?leadSource=uverify%20wall\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Bloomberg<\/span><\/a><span data-preserver-spaces=\"true\">, the first reaction to a market slow-down from investors is always an instinctive pull-back, with landlords canceling contracts and house flippers selling off their stock to clear inventories.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Does this have to be you? Not necessarily. One thing to remember about this housing market is that it\u2019s not poised to crash, but instead, correct. With the right approach, you can still turn a profit, whether you invest in long-term rental properties, short-term rentals, develop, etc.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">In a buyer\u2019s market, it becomes necessary to consider buyer needs and seller perks that will entice buyers who may be hesitant, given our higher interest rates.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">If you flip homes, which is of course one of the more challenging strategies in a receding market, seeking out cash buyers is the wise thing to do right now. According to Redfin CEO Glenn Kelman, accepting lower offers is the better strategy in a slower market over \u2018\u2019accruing interest expenses and other carrying costs as listings linger.\u2019\u2019<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">If you\u2019re an institutional landlord, then you may choose to hold back on expanding your inventory just now. It\u2019s all about waiting for the right moment when home prices come down even more. As Mark Zandi, chief economist for Moody\u2019s Analytics, explained to Bloomberg, \u201cInstitutional buyers are opportunistic. I\u2019m sure they\u2019re waiting, thinking they\u2019ll get a much better price for these properties in the not-so-distant future.\u201d&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">While it&#8217;s easy to run the wait-and-see strategy going into 2023, there are still plenty of opportunities to find in this housing market. That\u2019s why it&#8217;s more important now than ever to become a&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/membership-types\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">BiggerPockets Pro Member<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;to stay on top of the latest news and proven approaches to real estate investing.<\/span><\/p>\n\n\n\n<div class=\"wp-block-group border border-gray-200 p-6 rounded-md has-slate-50-background-color has-background\"><div class=\"wp-block-group__inner-container is-layout-flow wp-block-group-is-layout-flow\">\n    \n  <div \n    id=\"segemnt-view-event-block_624f52525847f\" \n    class=\"  \"\n    x-intersect:enter.once=\"\n      analytics.track('On The Market Blog Sponsor View', {\n        referrer: 'https:\/\/www.biggerpockets.com\/blog\/these-housing-markets-are-cooling-the-fastest',\n              })\n    \">\n    \n  <\/div>\n  \n\n\n<h3 class=\"has-text-align-left mt-0 wp-block-heading\"><strong>On The Market is presented by Fundrise<\/strong><\/h3>\n\n\n\n<figure class=\"wp-block-image size-large is-resized\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-1024x252.png\" alt=\"\" class=\"wp-image-142373\" width=\"256\" height=\"63\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-1024x252.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-300x74.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-768x189.png 768w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black.png 1380w\" sizes=\"auto, (max-width: 256px) 100vw, 256px\" \/><\/figure>\n\n\n\n<p class=\"mb-0 wp-block-paragraph\" style=\"font-size:16px\"><strong>Fundrise is revolutionizing how you invest in real estate.<\/strong><\/p>\n\n\n\n<p class=\"mt-0 has-slate-600-color has-text-color wp-block-paragraph\" style=\"font-size:16px\">With direct-access to high-quality real estate investments, Fundrise allows you to build, manage, and grow a portfolio at the touch of a button. Combining innovation with expertise, Fundrise maximizes your long-term return potential and has quickly become America\u2019s largest direct-to-investor real estate investing platform.<\/p>\n\n\n\n<div id=button-custom-event-block_624f4a1837234 class='button-custom-event'>\n      <a href=\"https:\/\/t.sidekickopen84.com\/s3t\/c\/5\/f18dQhb0S7kF8cpngfW16gy-_59hl3kW7_k2841CX6NGN35Qwt3rN_mgW56Jw3w1HcgXpf197v5Y04?te=W3R5hFj26QkH2W4hJTY63T3pkxW3Fbt5S3Cdl5cf49M_4s04&#038;si=8000000019411002&#038;pi=6988e0ed-1aea-4af5-9769-8a0de4675eeb\" x-on:click=\"window.analytics.track(&#039;On The Market Blog Sponsor Click&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/these-housing-markets-are-cooling-the-fastest&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\" rel=\"noopener\">Learn more about Fundrise<\/a>\n  <\/div>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>According to the latest data from&nbsp;Redfin, the housing market is slowing down in several major U.S. metros. The report included the top 20 U.S. hotspots and ranked them according to [&hellip;]<\/p>\n","protected":false},"author":613618,"featured_media":145081,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[8,7119],"tags":[],"class_list":["post-145072","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-trends","category-biggerpockets-daily"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/145072","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613618"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=145072"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/145072\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/145081"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=145072"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=145072"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=145072"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}