\nThe pandemic housing market era has made home price-growth trends more local in the last year than they have been since 2009, according to a new report<\/a> from Redfin (redfin.com<\/a>), the technology-powered real estate brokerage.<\/p>\n
\nMetro-to-metro variations in home-price growth reached a 13-year high in spring 2022, at the tail end of the pandemic homebuying boom. Though variation has come down since then, price growth still fluctuates much more than before the pandemic as the housing market cools quickly from the homebuying boom in some parts of the country but holds steady in others.<\/p>\n
\nThe historic price-growth gap between San Francisco and Miami illustrates just how local the housing market remains, with the Bay Area losing homebuyers and South Florida attracting them. San Francisco home prices are down 10.1% year over year, while Miami prices are up 10.9% to a near-record high. That 21-percentage-point difference is near the biggest in over three decades (it hit a peak of 23 points in August 2022), and it\u2019s the largest gap among the major U.S. metros Redfin analyzed.<\/p>\n
\nThe wide gap in price growth between San Francisco and Miami reflects the starkly different homebuying experience in those two parts of the country. Some Bay Area house hunters who have been priced out for the last few years may finally be able to break into the market\u2014if they can afford today\u2019s elevated mortgage rates and still-high prices and find a home for sale amid the supply shortage. Meanwhile, many South Florida locals are finding it harder than ever to afford a home.<\/p>\n
\nSan Francisco home prices are dropping largely because remote work has untethered many tech employees from the Bay Area, with domestic migration away from that part of the country more than doubling between 2020 and 2022. Additionally, layoffs in the technology industry and declining tech stocks\u2014combined with high mortgage rates and home prices that are still the most expensive in the country\u2014have diminished the Bay Area\u2019s pool of buyers. But Miami prices are still rising as the Sunshine State continues to attract remote workers fleeing more expensive parts of the country.<\/p>\n
\n\u201cThe stark difference in home-price dynamics between the Bay Area and Miami may be a reflection of a long-term, pandemic-fueled shift in where people choose to live,\u201d said Redfin Deputy Chief Economist Taylor Marr. \u201cThe fact that Miami prices are holding up well despite the national pullback in homebuying suggests the relative popularity of Florida is here to stay. Even though some employees are returning to offices at least a few days a week, the pandemic has given many Americans much more freedom on where they choose to live\u2014and a lot of them are choosing places where shelling out $1.5 million for a run-of-the-mill home isn\u2019t the norm.\u201d<\/p>\n
\nThe Bay Area is still much more expensive than South Florida, but as San Francisco\u2019s home prices fall and Miami\u2019s rise, the amount of money a homebuyer saves by moving across the country has diminished. San Francisco\u2019s median home-sale price was still 2.9 times higher than Miami\u2019s in February (roughly $1.42 million versus $483,000), but that\u2019s down from 4.4 times higher in February 2020.<\/p>\n
\nAfter San Francisco and Miami, the metros with the next-biggest gaps are also expensive West Coast tech hubs paired with relatively affordable Sun Belt locales.<\/p>\n
- \n
- \nSeattle-Miami: -9.4% YoY versus +10.9% YoY<\/p>\n<\/li>\n
- \nSan Francisco-Tampa, FL: -10.1% versus +7.7%<\/p>\n<\/li>\n
- \nSeattle-Tampa: -9.4% versus +7.7%<\/p>\n<\/li>\n
- \nSan Francisco-Atlanta: -10.1% versus +6.6%<\/p>\n<\/li>\n<\/ul>\n
It\u2019s important to pay attention to local housing-market trends<\/b><\/p>\n
\nFor homebuyers and sellers, the fact that prices are varying widely from metro to metro means it\u2019s more important than ever to focus on local trends.<\/p>\n
\n\u201cIf you\u2019re buying a home here in the D.C. area, don\u2019t rely on real estate advice from your friend in the Midwest or your cousin in California,\u201d said Washington, D.C. Redfin Premier agent Steve Centrella. \u201cInsights from other parts of the country can create confusion because they don\u2019t necessarily reflect what\u2019s happening on the ground in your neighborhood. For instance, demand for downtown condos is returning here as government employees return to the office, so buyers may encounter competition for desirable units. That may not be the case in other parts of the country.\u201d<\/p>\n
From the Great Recession to the global pandemic: Home-price growth varies most in times of boom or bust<\/b><\/p>\n
\nMost metro areas saw their median home prices change within 10.6 percentage points of the national average (+0.4% YoY) in February. That means price declines or increases were in the following range: -4.9% to +5.7% (San Francisco and Miami fall outside that range because they had the biggest decline and increase).<\/p>\n
\nPrice growth fluctuated even more from March through May 2022, when variation hit a 13-year high. Home prices were rising everywhere during those months, but how much <\/i>they were rising depended heavily on where you lived. They were increasing within 15.2 percentage points of the national average (+21.2% YoY in April 2022) in most metros, anywhere from +13.6% year over year to +28.8%. At that time, scores of homebuyers were relocating to popular Sun Belt destinations like Phoenix and parts of Florida, driven by low mortgage rates and remote work. High demand was pushing prices in those places way up, while prices were rising more modestly in other parts of the country like the Midwest and the Northeast.<\/p>\n
\nThe growth in home prices across metros has converged somewhat over the last year as mortgage rates have increased and the overall housing market has slowed. The gap remains bigger than it was before the pandemic because now home prices are falling <\/i>in many metro areas but still increasing in others (San Francisco versus Miami, for example). Varying levels of inventory and homebuying demand also impact prices differently in different areas.<\/p>\n
\nTake February 2020 as a pre-pandemic comparison. At that time, most metros experienced price growth within just three points of the national average (+3.5% YoY), putting them in the range of +2% to +5%.<\/p>\n
\nThe last time price growth varied as much as it did during the pandemic was in 2009. That\u2019s when home prices were plummeting in certain areas due to the subprime mortgage crisis. In February 2009, national home prices declined by a near-record 18.4%, but the decline was much bigger in some places and much smaller in others. Most metros saw their median home prices change within 18.4 points of the national average, creating a wide range. One example of that wide range: Home prices fell 35.2% year over year in Phoenix, but just 4.6% in Dallas.<\/p>\n
\n\u201cExtreme moments in history lead to extreme swings in home prices,\u201d said Redfin Deputy Chief Economist Taylor Marr. \u201cDuring economic boom times, when many Americans are flush with cash, homebuying demand soars because many people have the means to buy both primary and vacation homes and perhaps move from one part of the country to another. That pushes prices up in certain places and grabs the attention of home flippers, who jump into the ring and push prices up even further. When there\u2019s a recession like there was in 2009, or economic uncertainty and fears of a recession like in 2023, homebuyers quickly pull back and prices swing down in some areas.\u201d<\/p>\n
\nTo view the full report, including charts, additional metro-level data, and methodology, please visit: https:\/\/www.redfin.com\/news\/real-estate-local-home-price-growth-pandemic\/<\/a><\/p>\n
About Redfin<\/b><\/p>\n
\nRedfin (www.redfin.com<\/a>) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, title insurance, and renovations services. We also run the country’s #1 real estate brokerage site. Our home-buying customers see homes first with same day tours, and our lending and title services help them close quickly. Customers selling a home in certain markets can have our renovations crew fix up their home to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Customers who buy and sell with Redfin pay a 1% listing fee, subject to minimums, less than half of what brokerages commonly charge. Since launching in 2006, we’ve saved customers more than $1.5 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 5,000 people.<\/p>\n
\nFor more information or to contact a local Redfin real estate agent, visit www.redfin.com<\/a>. To learn about housing market trends and download data, visit the Redfin Data Center<\/a>. To be added to Redfin’s press release distribution list, email press@redfin.com<\/a>. To view Redfin’s press center, click here<\/a>.<\/p>\n
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View source version on businesswire.com: <\/span>https:\/\/www.businesswire.com\/news\/home\/20230523005435\/en\/<\/a><\/span><\/p>\n
Redfin Journalist Services:
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Isabelle Novak, 414-861-5861
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press@redfin.com<\/a><\/p>\nKEYWORDS:<\/b> Washington California Florida United States North America<\/p>\n
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