{"id":173375,"date":"2024-06-07T12:15:43","date_gmt":"2024-06-07T18:15:43","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=173375"},"modified":"2024-06-13T16:14:33","modified_gmt":"2024-06-13T22:14:33","slug":"crash-or-correction-home-prices-are-falling-in-these-cities","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/crash-or-correction-home-prices-are-falling-in-these-cities","title":{"rendered":"Crash or Correction? Home Prices Are Falling In These 15 Cities Across the Country"},"content":{"rendered":"\n\n      <iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm\/?e=BIGPOC3215322465\" width=\"100%\"><\/iframe>\r\n  \n\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">After several years of escalating home prices amid tight inventory<\/span><span data-preserver-spaces=\"true\">, as well as<\/span><span data-preserver-spaces=\"true\"> high interest rates that slammed the brakes on homebuying and investing, the first few dominoes <\/span><span data-preserver-spaces=\"true\">appear to<\/span><span data-preserver-spaces=\"true\"> have fallen as prices in some cities nationwide have started to tumble.<\/span><span data-preserver-spaces=\"true\"> Is this a blip or the start of a <\/span><span data-preserver-spaces=\"true\">larger<\/span><span data-preserver-spaces=\"true\"> trend?<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">15 U.S. Markets Have Recorded a Drop in Home Values<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">According to a <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nar.realtor\/newsroom\/more-than-90-percent-of-metro-areas-home-price-increase-1Q-2024\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">recent report<\/span><\/a><span data-preserver-spaces=\"true\"> by the National Association of Realtors, 7% of U.S. housing markets experienced declines in value in the first quarter of 2024. But before you <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/credit-score-buy-house\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">check your credit score<\/span><\/a><span data-preserver-spaces=\"true\"> and call your mortgage broker, let&#8217;s put this in perspective: These markets represent 15 out of 221 surveyed, so talk of a national price thawing might be premature.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">&#8220;Astonishingly, greater than 90% of the country&#8217;s metro areas experienced home price growth despite facing the highest mortgage rates in two decades,&#8221; NAR chief economist <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nar.realtor\/lawrence-yun\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Lawrence Yun<\/span><\/a><span data-preserver-spaces=\"true\"> said in the report. &#8220;In the current market, rising prices are the direct result of insufficient housing supply not meeting the full demand.&#8221;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">The <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/finance.yahoo.com\/news\/home-prices-keep-climbing-nationally-200700241.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">15 markets showing a slide in values<\/span><\/a><span data-preserver-spaces=\"true\"> are:<\/span><\/p>\n\n\n\n<figure class=\"wp-block-table is-style-regular\"><table><thead><tr><th>Metro Area<\/th><th>Year-Over-Year Change in Home Prices<\/th><\/tr><\/thead><tbody><tr><td><span style=\"font-weight: 400;\">Elmira, New York<\/span><\/td><td><span style=\"font-weight: 400;\">-15.1%<\/span><\/td><\/tr><tr><td><span style=\"font-weight: 400;\">San Antonio-New Braunfels, Texas<\/span><\/td><td><span style=\"font-weight: 400;\">-4.6%<\/span><\/td><\/tr><tr><td><span style=\"font-weight: 400;\">Cape Coral-Fort Myers, Florida<\/span><\/td><td><span style=\"font-weight: 400;\">-4.4%<\/span><\/td><\/tr><tr><td><span style=\"font-weight: 400;\">Panama City, Florida<\/span><\/td><td><span style=\"font-weight: 400;\">-3.8%<\/span><\/td><\/tr><tr><td><span style=\"font-weight: 400;\">Boulder, Colorado<\/span><\/td><td><span style=\"font-weight: 400;\">-1.7%<\/span><\/td><\/tr><tr><td><span style=\"font-weight: 400;\">Salem, Oregon<\/span><\/td><td><span style=\"font-weight: 400;\">-1.7%<\/span><\/td><\/tr><tr><td><span style=\"font-weight: 400;\">South Bend-Mishawaka, Indiana-Michigan<\/span><\/td><td><span style=\"font-weight: 400;\">-1.6%<\/span><\/td><\/tr><tr><td><span style=\"font-weight: 400;\">Logan, Utah-Idaho<\/span><\/td><td><span style=\"font-weight: 400;\">-1.3%<\/span><\/td><\/tr><tr><td><span style=\"font-weight: 400;\">Baton Rouge, Louisiana<\/span><\/td><td><span style=\"font-weight: 400;\">-1.1%<\/span><\/td><\/tr><tr><td><span style=\"font-weight: 400;\">Peoria, Illinois<\/span><\/td><td><span style=\"font-weight: 400;\">-1.1%<\/span><\/td><\/tr><tr><td><span style=\"font-weight: 400;\">Shreveport-Bossier City, Louisiana<\/span><\/td><td><span style=\"font-weight: 400;\">-0.9%<\/span><\/td><\/tr><tr><td><span style=\"font-weight: 400;\">Myrtle Beach-Conway-North Myrtle Beach, South Carolina-North Carolina<\/span><\/td><td><span style=\"font-weight: 400;\">-0.6%<\/span><\/td><\/tr><tr><td><span style=\"font-weight: 400;\">Austin-Round Rock, Texas<\/span><\/td><td><span style=\"font-weight: 400;\">-0.3%<\/span><\/td><\/tr><tr><td><span style=\"font-weight: 400;\">Crestview-Fort Walton Beach-Destin, Florida<\/span><\/td><td><span style=\"font-weight: 400;\">-0.2%<\/span><\/td><\/tr><tr><td><span style=\"font-weight: 400;\">Little Rock-North Little Rock-Conway, Arkansas<\/span><\/td><td><span style=\"font-weight: 400;\">-0.1%<\/span><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Why Have Home Prices Dropped in These Markets?<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">According to <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.redfin.com\/city\/6232\/NY\/Elmira\/housing-market\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Redfin data<\/span><\/a><span data-preserver-spaces=\"true\">, Elmira in upstate New York, on the border with Pennsylvania, is highly affordable, with a median house price of $90,213 as of April 2024. However, the <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.weny.com\/story\/50752003\/elmiracorning-area-home-prices-on-the-decline#\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">local Realtors Association states<\/span><\/a><span data-preserver-spaces=\"true\"> that the average home price is $146,000 as of the first quarter, with sales dropping 10% year over year. <\/span><span data-preserver-spaces=\"true\">This<\/span><span data-preserver-spaces=\"true\"> compares to a national median home price of $393,500.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a class=\"editor-rtfLink\" href=\"https:\/\/www.realestatenews.com\/2024\/05\/09\/mortgage-rates-ease-but-buyers-still-arent-getting-a-break#\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Nearly 30% of all metro areas<\/span><\/a><span data-preserver-spaces=\"true\"> saw double-digit price increases during the first quarter of 2024. Drilling down to Elmira, however, the Elmira-Corning Realtors Association shed some light on the issue, with recent data showing that the number of homes sold in the area last year was <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.yahoo.com\/news\/home-sales-down-2023-elmira-200432425.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">down by 20.5%<\/span><\/a><span data-preserver-spaces=\"true\"> compared to 2022. The number of homes sold in December 2023 was down 31.4% compared to the previous December.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">A Tipping Point<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">The main reason for the decline is that despite its modest prices, Elmira\u2014the city and county seat of Chemung County\u2014like most of the markets on the declining list, has experienced unsustainable sales price growth. It increased by <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.aol.com\/news\/hot-real-estate-market-elmira-100027923.html#!\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">17.8%<\/span><\/a><span data-preserver-spaces=\"true\"> in November 2022 over 2020 numbers and <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.mytwintiers.com\/news-cat\/home-sales-down-in-2023-in-elmira-corning-area\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">more modest growth<\/span><\/a><span data-preserver-spaces=\"true\"> after that as interest rates rose until it appeared to have reached a tipping point, with no break-in rates on the horizon.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">The same pattern appears true for other cities, such as Cape Coral, Florida<\/span><span data-preserver-spaces=\"true\">, having<\/span><span data-preserver-spaces=\"true\"> experienced a<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.marketwatch.com\/story\/housing-supply-surges-by-up-to-50-in-these-metro-areas-and-many-sellers-are-being-forced-to-slash-their-asking-prices-2b39f4ad?mod=aarthi-swaminathan&amp;mod=article_inline\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> surge in housing supply<\/span><\/a><span data-preserver-spaces=\"true\"> of up to 50%, which has loosened the market and caused prices to plunge.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">What Do Falling Prices Mean for Investors?<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Falling home prices could point to a window of opportunity for investors. Where the drops have been substantial, such as in Elmira, gauging how far prices are likely to fall and timing any purchase before a decrease in interest rates could allow investors to make out before prices rise again.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">However, simply buying real estate that has dropped in price to its normal levels is one thing, but ensuring you have tenants to fill a rental unit once it has been purchased and fixed up is another. <\/span><span data-preserver-spaces=\"true\">This<\/span><span data-preserver-spaces=\"true\"> is where some research comes in.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">If you&#8217;re looking to live and work in Elmira<\/span><span data-preserver-spaces=\"true\">, <\/span><span data-preserver-spaces=\"true\">for instance<\/span><span data-preserver-spaces=\"true\">,<\/span><span data-preserver-spaces=\"true\"> your employment opportunities might be<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/realestate.usnews.com\/places\/new-york\/elmira\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> limited<\/span><\/a><span data-preserver-spaces=\"true\">.<\/span> <span data-preserver-spaces=\"true\">However, Elmira was selected as the winner of the<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/steg.com\/resources\/economic-development-initiatives\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> $10 million Downtown Revitalization Initiative<\/span><\/a><span data-preserver-spaces=\"true\"> in the Southern Tier <\/span><span data-preserver-spaces=\"true\">and<\/span> <span data-preserver-spaces=\"true\">is strategically located<\/span><span data-preserver-spaces=\"true\"> between major commercial corridors.<\/span><span data-preserver-spaces=\"true\"> In addition, the downtown area is active and walkable, and the healthcare industry there has been growing, with plans for some significant development and new housing.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Elmira College is also a local attraction. Plans for a trendy brewery-style bar with a large gaming area called <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.mytwintiers.com\/news-cat\/new-businesses-coming-to-downtown-elmira\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Centertown Social are in the works,<\/span><\/a><span data-preserver-spaces=\"true\"> bringing people to the downtown area year-round. New restaurants, a juice bar, and a jazz club are also in the works.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Given the low barrier to entry, price-wise, for opportunistic investors, small cities like Elmira could be a feasible way to buy income-producing real estate at the start of an urban renewal cycle. However, <\/span><span data-preserver-spaces=\"true\">it must be stressed<\/span><span data-preserver-spaces=\"true\"> that jumping on board a small, down-on-its-heels city at the <\/span><span data-preserver-spaces=\"true\">start<\/span><span data-preserver-spaces=\"true\"> of a revitalization project is a high-risk, high-reward scenario. Elmira has long had a <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.neighborhoodscout.com\/ny\/elmira\/crime#:~:text=With%20a%20crime%20rate%20of,to%20the%20very%20largest%20cities.\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">reputation for crime<\/span><\/a><span data-preserver-spaces=\"true\"> and a lack of employment. A turnaround is by no means guaranteed.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Opportunities for Flippers<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Low inventory and increasing home prices have seen intrepid <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/guides\/how-to-flip-houses\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">flippers<\/span><\/a><span data-preserver-spaces=\"true\"> who have found deals turn a tidy profit recently despite soaring mortgage rates. Despite the drop in flips overall nationally, those who have stayed in the game have benefited from a &#8220;strong sales environment,&#8221; according to the new <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/jbrec.com\/research\/fix-and-flip-survey\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Burns, Sundae, and Kiavi Fix and Flip Survey<\/span><\/a><span data-preserver-spaces=\"true\">, as reported by national real estate data company <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.costar.com\/article\/4292873\/house-flippers-find-success-despite-tough-market-conditions\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">CoStar<\/span><\/a><span data-preserver-spaces=\"true\">.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">&#8220;Low inventory is creating the current frenzy,&#8221; a Seattle flipper said in the survey. &#8220;Once rates drop, it&#8217;s going to be bonkers,&#8221; with more demand for flipped homes.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Now that home prices in some markets are starting to fall, flippers who are confident of a rebound once interest rates drop can plan their flips accordingly, finishing projects to coincide with the widely anticipated slew of Federal Reserve rate cuts.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Final Thoughts<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Low inventory around much of the country means that it&#8217;s unlikely that we&#8217;ll see home prices crash despite high interest rates. Beleaguered buyers, priced out of the market, face the prospect of even higher prices when rates come down.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">However, in areas where the market has, in effect, said &#8220;enough is enough,&#8221; and home prices have started to fall, there are windows of opportunity for investors. The great unknown, of course, is interest rates. It&#8217;s not worth losing money in negative <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/rental-property-cash-flow-analysis\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">cash flow<\/span><\/a><span data-preserver-spaces=\"true\"> every month or taking on a risky flip, banking on rising prices if you are not in a financially strong position to weather the storm.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">For those who are in a good position, however, and can play the real estate long game, temporary pockets of falling prices present an undeniable opportunity\u2014one that still needs to be thoroughly vetted through <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/real-estate-investment-analysis\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">analysis of a potential market<\/span><\/a><span data-preserver-spaces=\"true\">.<\/span><\/p>\n\n\n\n<div id=\"hero-block_72bc1381cb9f68466bd0972f160ef38c\" class=\"first:mt-0 hero-block py-4  alignwide   has-background has-slate-50-background-color has-text-color has-theme-gold-color\">\n    <div\n        class=\"gap-10 lg:gap-20 flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 lg:w-1\/2 \">\n            <main class=\"py-4\">\n                \n\n<p class=\"has-slate-800-color has-text-color has-large-font-size wp-block-paragraph\" style=\"font-style:normal;font-weight:800\">Get More Time to Scale<\/p>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-slate-900-color has-text-color wp-block-paragraph\" style=\"font-size:18px\">Find trusted property managers and get everything you need to make confident hiring decisions.<\/p>\n\n\n\n<div id=button-custom-event-block_1bcb980c6a2a216019110c27e5c36630 class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/business\/finder\/property-managers\" x-on:click=\"window.analytics.track(&#039;Blog Block | B2C Marketplace Property Management Finder&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/crash-or-correction-home-prices-are-falling-in-these-cities&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Find a Property Manager<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n                <div class=\"lg:w-1\/2 first:mt-0 relative h-full lg:flex lg:items-center\">\n            <img decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  rounded-md\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2024\/05\/PM-Finder1.png\" alt=\"find a property management company\" title=\"\">\n        <\/div>\n            <\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>After several years of escalating home prices amid tight inventory, as well as high interest rates that slammed the brakes on homebuying and investing, the first few dominoes appear to [&hellip;]<\/p>\n","protected":false},"author":613725,"featured_media":173382,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7381,7119],"tags":[],"class_list":["post-173375","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-housing-prices","category-biggerpockets-daily"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/173375","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\/613725"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=173375"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/173375\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/173382"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=173375"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=173375"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=173375"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}