But each market dances to a different drummer, and declines have been far bigger in many markets.
By Wolf Richter for WOLF STREET.
Home sellers have been nudging down more or less gradually the listing prices in many markets, including in the three biggest – Florida, California, and Texas – from the insane highs in mid-2022 when only the sky was still the limit.
The reality they’re now grappling with includes mortgage rates that have normalized, much less buyer demand than before 2022, and accelerating consumer price inflation of likely over 4% in May.
The median listing price of existing homes in May fell by 2.4% year-over-year, the biggest year-over-year decline in the data by Realtor.com, which goes back to only 2017. On a per-square-foot basis, the median price dropped by 2.5% year-over-year.
The chart above also shows the mania that reigned in the housing market from mid-2020 through mid-2022, topping out with a year-over-year increase of 18% in June 2022, by which time demand was already plunging, as buyers weren’t playing along anymore, and demand has dropped further since then.
Median listing price in dollars. June marks the seasonal high points for the median listing price in the US. In June 2022, there was a huge price jump from May 2022, and June 2022 marked the absolute highpoint, as shown in the chart below.
But the highest May was May 2023. Compared to May 2023, the median listing price in the US fell by 2.6%, to $429,500.
But each market dances to a different drummer.
Listing prices fell in 35 of the 50 largest metros, and rose in 15. These are the 35 metros were listing prices declined year-over-year:
| 1 | Memphis, TN-MS-AR | -13.0% |
| 2 | Buffalo-Cheektowaga, NY | -11.6% |
| 3 | Austin-Round Rock-San Marcos, TX | -9.5% |
| 4 | Los Angeles-Long Beach-Anaheim, CA | -7.9% |
| 5 | San Diego-Chula Vista-Carlsbad, CA | -5.6% |
| 6 | Phoenix-Mesa-Chandler, AZ | -5.1% |
| 7 | San Antonio-New Braunfels, TX | -4.4% |
| 8 | Indianapolis-Carmel-Greenwood, IN | -3.5% |
| 9 | Houston-Pasadena-The Woodlands, TX | -3.4% |
| 10 | Salt Lake City-Murray, UT | -3.4% |
| 11 | Boston-Cambridge-Newton, MA-NH | -3.4% |
| 12 | Oklahoma City, OK | -3.3% |
| 13 | Columbus, OH | -2.6% |
| 14 | Baltimore-Columbia-Towson, MD | -2.5% |
| 15 | Jacksonville, FL | -2.5% |
| 16 | Minneapolis-St. Paul-Bloomington, MN-WI | -2.5% |
| 17 | New York-Newark-Jersey City, NY-NJ | -2.5% |
| 18 | Charlotte-Concord-Gastonia, NC-SC | -2.4% |
| 19 | Portland-Vancouver-Hillsboro, OR-WA | -2.4% |
| 20 | Orlando-Kissimmee-Sanford, FL | -2.3% |
| 21 | Louisville/Jefferson County, KY-IN | -2.2% |
| 22 | Richmond, VA | -2.2% |
| 23 | Miami-Fort Lauderdale-West Palm Beach, FL | -2.2% |
| 24 | Las Vegas-Henderson-North Las Vegas, NV | -2.1% |
| 25 | Detroit-Warren-Dearborn, MI | -1.9% |
| 26 | Cleveland, OH | -1.9% |
| 27 | Denver-Aurora-Centennial, CO | -1.8% |
| 28 | Nashville-Davidson–Murfreesboro–Franklin, TN | -1.6% |
| 29 | Cincinnati, OH-KY-IN | -1.4% |
| 30 | Milwaukee-Waukesha, WI | -1.1% |
| 31 | Dallas-Fort Worth-Arlington, TX | -0.9% |
| 32 | Providence-Warwick, RI-MA | -0.8% |
| 33 | Riverside-San Bernardino-Ontario, CA | -0.8% |
| 34 | Sacramento-Roseville-Folsom, CA | -0.6% |
| 35 | San Francisco-Oakland-Fremont, CA | -0.1% |
In the three biggest real estate markets by state – Florida, California, and Texas – median listing prices have fallen more than at the overall national level.
In Florida, the median listing price in May fell by 3.4% year-over-year and by 12.2% from May 2022 to $425,000, according to data from Realtor.com.
In Texas, the median listing price in May fell by 2.7% year-over-year and by 7.8% from May 2022 to $365,000. Those prices are very seasonal, with the summer months marking the high points:
In California, the median listing price in May fell by 3.2% year-over-year and by 4.6% from May 2024 to $750,000, and is back where it had been in the summer of 2021.
California’s high, which occurred in 2024, lagged by two years the highs in Florida and Texas. Every market dances to a different drummer.
Lower prices stimulate demand. But prices haven’t dropped nearly far enough, and demand for existing homes remains utterly depressed, down by 22% from the same time in 2019 and down by 30% from 2021 (per latest data from the National Association of Realtors for April):
Listing prices are an indication of sellers’ initial expectations, of how sellers see the market, their wish price, so to speak; they don’t reflect actual sales prices derived from closed sales. Homes with too-high listing prices don’t sell and never make it into the actual home sales data. High initial listing prices can also lead to a higher rate of price cuts.
Pulling homes off the market when they don’t sell is now very active. These homes are then either relisted eventually for sale at a lower price, or are listed on the rental market, where they may languish for a while before they’re pulled again, and then are relisted for sale at a lower price.
And if renters do bite, those homeowners become accidental landlords, of which there has been a big wave.
Homes whose listing prices are on target do sell, and the sales prices of those homes then make it into the sales data. The buyers set that target, and they decide whether or not the seller hit it.
Sellers’ price expectations are important because they can stimulate or destroy demand – and demand has been destroyed by too-high prices.
In case you missed it: Housing Unit Growth Far Outruns Population Growth: Vacant Units on the Market and the “Accidental Landlords”
Enjoy reading WOLF STREET and want to support it? You can donate. I appreciate it immensely. Click on the mug to find out how:
