10 cities where home prices are falling the most, as pandemic boomtowns cool down

Sun, 09/24/2023 - 06:03

A neighborhood view of Boise, Idaho.
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Home prices are falling in cities that saw large growth in recent years, according to Realtor.com.
High monthly payments have dampened buyer demand creating room for negotiation at the closing table.
Prices are falling in pandemic boomtowns like Austin, Texas; Ogden, Utah; and Boise, Idaho.

Prospective homebuyers waiting for prices to drop have something to be excited about. Listings site Realtor.com just put out a new ranking of where home prices are falling the most, compared to a year ago.

Cities like Ogden, Utah, and Boise, Idaho, that were heralded as boomtowns as remote workers from across the country flocked to locations with more outdoor space and less expensive homes, are now reversing the upward trend in housing prices. Other hotspots like Austin, Texas, and Myrtle Beach, South Carolina, saw drops of 2% or more.

"These are some areas that saw really rapid price growth in the past several years — there was just enormous demand," Realtor.com data journalist Evan Wyloge told Insider. "It stands to reason that in these places that were the hottest and where prices were rising the fastest, when mortgage rates cranked up, that put the brakes on transactions and overall buyer capacity and interest."

With fewer transactions happening, sellers are more inclined to drop their prices. This could also help out younger buyers seeking to purchase a home. For example, 31% of homebuyers in Ogden from April to July were Gen Zers.

To calculate its list, Realtor.com looked at the change in the median list price per square foot for the 50 largest metro areas, comparing data for August 2023 and August 2022. It also included only one metro area per state to ensure the list had geographic diversity.

Dropping single-digit percentage points may not seem like a lot, but in these housing markets that have inflated over the years, that is thousands of dollars in savings, Wyloge said. Here are the 10 cities where home prices fell the most between August 2022 and August 2023, according to Realtor.com.

10. Jackson, Mississippi