The housing market slowdown is in full force on the West Coast, as high mortgage rates and layoffs in the tech industry weigh on home sales.
According to a new report from Redfin
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the housing markets that are slowing the fastest include big cities on the West Coast, such as Seattle and San Jose, as well as pandemic boomtowns like Austin and Phoenix.
“Measures of homebuying demand and competition are dropping off quickly in tech centers,” the report said.
And in pandemic boomtowns, popular among remote workers amid the coronavirus pandemic, are also seeing a dip in interest.
The report ranked the 100 most populous U.S. metro areas. Looking at year-over-year changes in prices, the drop in prices, supply, pending sales, and other metrics between February 2023 and 2022, the report’s authors found that Austin, Texas has cooled the fastest.
“Austin is a victim of its own popularity,” Redfin said. “The surge of affluent homebuyers pushed up local home prices, and the subsequent rise in mortgage rates priced out even more local residents.”
“‘Austin is a victim of its own popularity.’”
Second and third on the list are Seattle and Phoenix. Las Vegas, San Jose, and Oakland all feature in the top 10.
The pullback in buying came alongside a surge in mortgage rates. As of Monday afternoon, the 30-year was averaging at 6.54%, according to Mortgage News Daily.
Amid high rates and a low inventory, U.S. home buyers are struggling to find good deals.
And more broadly, consumers are concerned about the state of housing. A separate survey by Numerator, which tracks consumer sentiment on a monthly basis, noted that in March, 30% of consumers were worried about the stability of the housing market, up 5 percentage points from February.
But the slowdown is not necessarily a bad thing, one real-estate expert said.
The last couple of years “were really just an unsustainable pace and a total anomaly,” Emily Chenevert, chief executive at the Austin Board of Realtors, told MarketWatch. “We see a market now where there’s more opportunity for buyers to negotiate a little bit, take their time, to find the right home for their liking.”
Across the country, more affordable housing markets on the Midwest and Northeast are still holding up in terms of sales and listings, Redfin said.
Out of the 100 most populous metro areas, Hartford, Conn. is showing signs of strength (but it’s not necessarily a hot market).
Other metro areas in the state, like New Haven and Bridgeport, as well as upstate New York areas like Albany and Rochester, are also holding up, Redfin said.
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