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Cooling Real Estate: Trends and Indicators in US Cities

Cooling Housing Markets in US Cities: Indicators and Trends

Real estate markets in many US cities are experiencing a cooling trend as sales growth slows down. The housing industry thrived during the early years of the decade as a result of a buoyant economy, but the boom has tapered off in recent years.

This article examines some significant indicators of cooling housing markets as well as some cities experiencing the trend and the possible reasons behind the phenomenon.

Indicators of Cooling Housing Markets

Pending Sales: Pending home sales are an indicator of future home sales activity. This term refers to contracts that have been signed but not yet closed, and if the number of pending sales is high, this would suggest strong future activity, but the opposite is true for low pending sales.

According to the National Association of Realtors (NAR), pending sales went from being very high in May to lower than expected in June and July. This trend indicates that the market is cooling off.

Homes Sold: The number of homes sold is another key central element to gauge the strength of the housing market. Generally, when homes sell slowly, that’s a signal that supply outweighs demand.

And if homes remain unsold for a more extended period, prices could start to fall. In June, The United States Census Bureau stated that sales of new one-family houses in the U.S. had dropped to an annualized figure of 676 thousand.

This figure was deemed the fewest since the 655,000 reported in April. These data collectively demonstrate that the market is generally seeing a downshift, which might be due to the incredibly high property prices, millennials staying to rent instead of purchasing homes, and a global recession.

But it’s crucial to understand that while the housing market is slowing, it’s still in a really strong position.

Cities with Cooling Housing Markets

Riverside: The Inland Empire’s housing prices have been experiencing a cooling trend for much of the year, indicating a softening of the demand side of the equation as home builders come to grips with a more sustained, slow-growth market. Between March-April of this year, Median homes’ prices have gone down from $390,000 to $385,000, while closed deals have decreased from 3,015 homes to 2,697, and pending deals from 4,599 to 3,511.

Nashville: After a torrid run-up in recent years, Nashville’s home prices are becoming more expensive. However, the market slowdown has allowed customers to catch a breath.

Prices fell from roughly $320,000 to $317,000 between March-April this year, while pending deals dropped from 3,558 to 3,168 and closed deals from 3,186 to 2,772. Fort Worth: After a frenetic few years, Fort Worth’s housing market is cooling down.

Median homes’ prices fell from $225,000 to $221,000 between March-April this year, with closed deals down from 1,493 to 1,357 and pending deals from 2,199 to 2,028. West Palm Beach: West Palm Beach presented a downward trend in both supply and demand.

Beginning from Median homes’ prices, closed and pending deals that fell respectively from $265,000 to $262,000, 1,247 to 1,032, and 2,604 to 2,211 between March-April this year. Dallas: Dallas has witnessed a decline in housing affordability, and a sharp rise in demand has slackened, putting developers in an overstocked and highly competitive market.

Median homes’ prices fell from around $360,000 in March to around $357,000 in April of this year. Closed deals dropped from 4,976 to 4,278 while pending deals fell from 5,216 to 4,310.

Austin: For the first time in years, the Austin area’s housing prices have fallen. After a few years of increasing sales prices, the situation changed recently.

Median homes’ prices fell from $326,000 in March-April to $319,000, closed deals from 2,688 to 2,447, and pending deals from 3,646 to 3,031. Fort Lauderdale: After some years of frenzied growth, Fort Lauderdale is finally starting to cool down.

Median homes’ prices dropped from $308,000 in March to $303,000 in April of this year. Closed deals decreased from 1,508 to 1,269, while pending deals fell from 2,473 to 2,052.

Las Vegas: Las Vegas’s housing market shows signs of slowing after the region experienced a significant expansion. Median homes’ prices have decreased from $307,000 to $299,000 between March-April this year, while closed deals also deduced from 3,247 to 2,965, and pending deals from 4,873 to 3,328.

Houston: One of the nation’s most robust housing markets is starting to slow, and it’s got some homeowners worried. Median homes’ prices fell slightly from March-April this year, from $227,000 to $225,000, with closed deals decreasing from 5,745 to 5,062, and pending deals from 8,382 to 7,320.

Phoenix: The Phoenix area figures prominently in many lists of the hottest real estate markets. However, The region is beginning to show signs of cooling off.

Median Homes’ prices dropped from $279,900 to $278,000 between March-April this year, with closed deals dropping from 7,273 to 6,450, and pending deals from 9,896 to 8,660. Tampa: Tampa Bay’s housing market has been hot for a while.

However, real estate agents see signs that the tide may finally be starting to turn. Median homes’ prices fell slightly from $243,000 to $237,000 between March- April this year, with closed deals decreasing from 3,499 to 2,912, with pending deals decreasing from 4,899 to 4,312.

Orlando: Orlando’s housing market has been one of the most active in the country. However, the region may be starting to slow down a bit.

Median homes’ prices dropped from just above $300,000 to around $299,000 between March-April this year, with closed deals decreasing from 3,668 to 3,136, and pending deals from 5,458 to 4,677. Atlanta: After a strong run in recent years, the Atlanta housing market is cooling off a bit.

Median homes’ prices experienced a small deduction from $253,000 to $251,000 amid March-April this year. Pending deals fell from 9,894 to 8,464, while closed deals fell from 9,162 to 8,121.

San Antonio: The San Antonio housing market is going through a cooling spell. Median homes’ prices have decreased from $212,000 to $209,000 between March-April this year, while closed deals dropped from 2,241 to 1,963, and pending deals from 3,028 to 2,623.

Buyers Backing Out of Deals

Cold Feet: One of the main reasons behind buyers backing out of deals on a house that haven’t closed yet is that they get cold feet after making it. A buyer who wasn’t genuinely interested in buying a home enough to put the money down can easily walk away from the deal when they have second thoughts about it.

Competition: The level of competition is essential to consider because it drives buyers to make fast, potentially regrettable decisions. Bidding wars can encourage individuals to expand their budget to secure a home, going beyond what they intended to spend.

When someone loses a bid in a bidding war, they may back out of a deal because they don’t want to pay the higher price, leaving sellers in the lurch.

Potential Impact on Home Prices

Falling Home Prices: With fewer buyers interested in purchasing homes, the home prices may not perform very well. Homeowners may decide to reduce their asking price to make the deal more enticing to reluctant buyers.

That would result in lower prices overall, benefitting buyers but hurting homeowners who intended to sell their home for a more considerable profit. Financial Stress: If the economy isn’t performing well, the housing market could start to see financial strain.

In this scenario, homeowners looking to sell their property could be avoided because of fears that they may not get an appropriate price. Buyers that are interested might delay their purchase on the hopes of finding a better deal later on.

Conclusion

In conclusion, it’s important to note that a cool market isn’t necessarily bad news for home buyers or investors. Sluggish sales growth, lower home prices, and weak demand can create opportunities for buyers to get some great deals.

Also, for investors, periods like this can offer opportunities to acquire properties at lower prices and immediately rent them out to earn consistent rent payments. The current trends in the market show that real estate is a dynamic and cyclical sector.

One can expect changes to happen in a relatively short period. Statistics and Trends in Cooling Housing Markets: Understanding the Current State of Real Estate

As the economy continues to shift and the pandemic lingers on, the housing market across the United States is slowly beginning to see a cooling trend.

This trend is characterized by declining sales, stagnant pricing, and a more competitive marketplace for sellers. In this article, we will look at subtopics 3.1 through 3.14, examining the statistics and trends of cooling housing markets in cities across the country to help you understand the current state of real estate.

Riverside, California

Riverside, CA is experiencing a cooling housing market, evident by a 20.8% decrease in pending sales and a 29.9% decline in homes sold, according to recent data from Redfin. While this may seem alarming, there are factors behind the decrease in sales, such as mortgage rates hitting their highest levels in almost a year.

This may have kept some prospective home buyers on the sidelines, waiting for rates to drop before jumping into the market. Nashville, Tennessee

Nashville, TN is seeing a cooling trend in the housing market, with a 20.9% decrease in pending sales, according to Redfin.

While inventory remains tight, buyers are beginning to have more bargaining power, with 60.3% of homes selling above list price in April and only 21.2% in September. This shift in market conditions is a signal that buyers may have more options and leverage in the coming months.

Fort Worth, Texas

Fort Worth, TX is also experiencing a cooling housing market, according to data from Redfin. The city saw a 21% decrease in pending sales, a 27.5% increase in homes sold above list price in September, and a 28.8% year-over-year decline in homes sold.

The cooling trend could be due to a rise in interest rates, falling job growth, and economic uncertainty caused by the pandemic. West Palm Beach, Florida

West Palm Beach, FL is among the cities with the most substantial cooling trend, as it experienced a 21.1% decline in pending sales and a 39% decline in homes sold year-over-year, according to Redfin data.

This decline may be related to a decrease in migration, economic instability, and rising interest rates. Dallas, Texas

Dallas, TX saw a 21.1% decrease in pending home sales and a drop in housing prices, with the median home price going from $490,000 in May to $399,500 in September, according to data from Redfin.

The colder market in Dallas could be attributed to an oversupply of homes in some areas, as well as a general slowdown in the Texas economy. Austin, Texas

Austin, TX is experiencing a cooling trend in the housing market, with a 21.3% decrease in pending sales and an increase in homes on the market.

The median time a home spends on the market is currently 50 days, which is 15 days longer than the same time last year. Fort Lauderdale, Florida

Fort Lauderdale, FL saw a 22.1% decrease in pending sales and a 32.6% decline in homes sold year-over-year, according to Redfin data.

A possible explanation for the decline in sales could be a shift in the desirable features of a property, an oversupply of homes, or an increase of work from home options due to the pandemic. Las Vegas, Nevada

Las Vegas, NV experienced a 22.7% decline in pending sales and a 41.8% decline in homes sold year-over-year.

This trend could be part of a broader slowdown in the tourism industry, which is a significant economic driver in the city. Houston, Texas

Houston, TX is experiencing a cooling housing market, with a 23% decrease in pending sales, a 20.5% year-over-year decline in homes sold, and 21.6% of homes selling above list price, according to data from Redfin.

These trends may point to an oversupply of properties leading to a more competitive market. Phoenix, Arizona

Phoenix, AZ is experiencing a cooling trend, with 23.5% pending sales decline in September, according to Redfin.

The city, with its low inventory and growing population, had a median time on the market of 43 days, which is 17 days longer than the previous year. Tampa, Florida

Tampa, FL is seeing a cooling trend, with a 24.5% decrease in pending sales and a decline in the number of homes sold year-over-year.

One possible factor responsible for this trend is the impact of Hurricane Ian on the real estate market. Orlando, Florida

Orlando, FL is seeing a cooling trend in the housing market, with a 24.6% decrease in pending sales but an increase in median days on the market to 20, the highest it has been since February 2021.

The influx of cash buyers and Disney Worlds pull may explain the shift. Atlanta, Georgia

Atlanta, GA is experiencing a cooling housing market, with pending sales down by 25%.

The number of homes sold was also down by 28.3% year-over-year. The regional economic engine reaction to the pandemic may contribute to the current market state.

San Antonio, Texas

San Antonio, TX is experiencing a cooling trend in the housing market as seen by a 25.3% decrease in pending sales and an increase to a median of 29 days on the market. One potential explanation is overs

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