From Boom To Bust: Home Prices Are SIGNIFICANTLY Dropping In These Four Formerly-BOOMING U.S. Cities

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In a surprising turn of events, home prices are witnessing a decline in four previously thriving markets, as exorbitant housing costs deter potential homebuyers.

This trend is particularly noticeable in Texas, where three metropolitan areas are experiencing a dip in property values, as reported by Redfin, a leading real estate company.

According to the Daily Mail, this unexpected downturn in property values follows a period of significant growth, fueled by the mass exodus of Americans to the Lone Star State during the COVID-19 pandemic. This sudden influx of new residents drove housing prices sky-high, particularly in Austin, where home sales have seen a 2.9 percent year-over-year decrease.

Austin, often referred to as a pandemic 'boomtown,' has attracted a significant number of newcomers in recent years, largely due to the city's burgeoning tech industry. However, the city's appeal has not been enough to sustain the inflated housing market, with prices in San Antonio and Fort Worth also falling by 1.2 percent. Meanwhile, home sale prices in Portland, Oregon, have decreased by 0.9 percent.

Redfin's data indicates that the nationwide drop in prices is the most significant since November 2022, suggesting that other regions may soon experience a similar trend. Despite the localized declines, house prices across the U.S. have risen by 4.4 percent from the previous year, reaching an all-time high in the four weeks ending June 2. The median sale price during this period was $392,200.

However, there are early signs that this national price growth could soon decelerate, with one in 15 home sellers reducing their asking price during this period. In Austin, house prices fell 2.9 percent year-over-year to the beginning of this month. The city has become a hub for major tech companies such as Tesla and Oracle, whose relocation to Austin, coupled with low taxes, has attracted a wave of high-earning workers during the pandemic.

The influx of wealth into Austin has been so significant that the city now boasts the fastest-growing population of millionaires in the U.S., according to separate data released earlier this year. Over the past decade, the number of millionaires in the city has surged by 110 percent to 32,700. This wealth boom has priced some homebuyers out of the market, leading to the current decline in prices.

San Antonio and Fort Worth have also seen an increase in residents drawn by the lower cost of living, improved quality of life, and absence of income tax. However, this influx has similarly led to inflated property prices that are now beginning to fall. A recent survey by Zillow revealed that Texas had the second-highest number of new residents among all 50 states in 2022, attracting the most Gen Z movers.

In contrast, Portland, Oregon, has seen more people leaving the state than moving in during 2022, leading to the fourth-largest year-over-year price decline, according to Redfin. The typical active listing in the state has been on the market for 46 days, a 2.3 percent year-over-year increase. This suggests that high mortgage rates and housing costs are discouraging potential buyers, causing listings to stagnate.

The weekly average mortgage rate rose above 7 percent last week, according to data from government-backed lender Freddie Mac. This increase has pushed the median U.S. monthly housing payment to a near-record-high of $2,838. Despite these challenges, some buyers are finding success in negotiating with sellers. "I've seen buyers get a home under asking price when it has been on the market for a few weeks," said Bonnie Phillips, a Redfin agent in Cleveland.

In addition to the Texas and Oregon markets, Redfin's data also indicates a decline in home prices in Florida hotspots due to a surge in supply. On the state's west coast, the number of properties on the market is increasing, and homes are taking longer to sell, suggesting that the housing market may be entering a period of adjustment.