U.S. Housing Market Recovers The Nearly $3 Trillion It Lost
U.S. homes hit a record $46.8 trillion in June. This overtakes the prior all-time high of $46.6 trillion set a year earlier.
According to Redfin, there are 32 U.S. metropolitan areas where aggregate home value declined from a year earlier in June, bucking the national trend. Eleven of those 32 are in California and seven are in Texas. This analysis includes the 100 most populous metro areas for which there was sufficient data.
The value of homes in Austin, TX fell 9.6% year over year to $388.1 billion in June—a larger decline than any other metro. Next came Oakland, CA (-8.7%), Seattle (-8.1%), San Francisco (-7.8%) and Los Angeles (-6.6%). Rounding out the top 10 are San Jose, CA, Phoenix, Oxnard, CA, Las Vegas and Sacramento, CA.
Pricey West Coast markets like San Francisco and Seattle have experienced outsized declines because they’re among the most expensive markets in the nation, meaning home values had more room to fall. Scores of remote workers left these areas during the pandemic in search of more space and better bang for their buck, contributing to the drop in value. Additionally, the West Coast has been hit hard by tech layoffs. Many buyers in pricey coastal markets also got sticker shock after seeing the impact of elevated mortgage rates on paper; in a metro like San Francisco, a higher rate can equate to a monthly housing bill that’s thousands of dollars more expensive.
The situation is somewhat similar in pandemic boomtowns; home values overheated, leaving many people priced out. Values surged in Sun Belt metros including Austin, Phoenix and Las Vegas because scores of remote workers moved in. Now, home values in those areas are coming back down to earth.
“Occasionally, a special house will get multiple offers, but that’s not the norm in Austin anymore,” said local Redfin Premier real estate agent Carmen Gioia. “Buyers are shopping but taking their sweet time, in part because there’s so much inventory. I’m warning my sellers that it could take a few weeks to sell, even if their home is priced well.”
In dollar terms, Los Angeles saw the biggest decline in aggregate home value, posting a $152.6 billion year-over-year decline in June. It was followed by Oakland (-$85.8 billion), Seattle (-$82.7 billion), Phoenix (-$58.4 billion) and San Francisco (-$57.5 billion).
