The housing market this past year has taught home seekers a thing or two about deep fears. And with Halloween — a celebration of haunted houses and all things unsettling — just around the corner, the holiday may further prompt them to reflect on the equally unsettling state of the American Dream. But, how scary has it gotten for homebuyers and what are the cities that make their blood run cold?
The 30-year fixed-rate mortgage hit the highest levels in decades; home prices have been on the up-and-up and are expected to continue their climb in 2024; and the current for-sale inventory represents less than one year’s worth of supply. Simply put, this year has been tricky for homebuyers. Yet, while some markets manage to keep things afloat, others cause buyers to sink into the depths of despair.
To see how sour things have turned for buyers this past year, Point2 set out to determine the scariest housing markets. We analyzed the 200 largest in the country – including the five NYC boroughs – across four metrics reflective of every homebuyer’s main fears: median price; y-o-y difference in home price; y-o-y difference in for-sale inventory; and fewest days on the market. The final scores made large California markets the boogeymen, and Southeastern markets rays of sunshine by comparison.
From exploding prices and elusive inventory to regrets about not buying yet and homes slipping through their fingers, here are the main takeaways on the bone-chilling horrors awaiting those seeking to secure their dream home amid fears of a housing market crash:
- Purchasing a home is tough everywhere, but data points to some cities accumulating the bulk of buyers’ fears in the past year; 9 of the 10 scariest markets are in California — led not by LA or San Francisco, but by Sunnyvale and Escondido.
- Prices have risen the most in markets known for being among the more affordable of the 200 largest: Compared to 2022, homebuyers in Louisville, KY, Tallahassee, FL, and Kansas City, KS, now deal with home prices that are more than 20% higher.
- Monster prices are a reality not just in established hyper-wealthy markets — like Manhattan or San Jose, CA — but also in emerging West Coast hubs, like Sunnyvale ($1.7M), Bellevue, WA ($1.4M), Glendale, CA ($1.3), and Torrance, CA ($1.1M).
- For-sale inventory has reached near historic lows: 28 of the 200 largest U.S. markets had their housing stock cut in half since 2022, with California’s Fremont and Sunnyvale now selling around 60% fewer homes compared to last year.
- Sky-high demand keeps buyers on their toes: Homes fly off the market in just 10 days or less in 19 large cities; In Grand Rapids, MI, and Lakewood, CO, active listings last less than a week.
Scariest Markets for 2023’s Homebuyer: Move Over LA & San Fran, It’s Sunnyvale & Escondido’s Turn
The understatement of the century: California is expensive. So much so that, 9 of the 10 scariest cities to buy a home in are all in the Golden State. What may be shocking, though, is that the toughest markets for homebuyers might not be the first ones that come to mind.
Of the 200 largest markets in the U.S. across all four metrics, these are the scariest for homebuyers:
Prospective owners in Sunnyvale are smack in the middle of the Bermuda Triangle of housing: High home prices, low inventory, and listings disappearing in the blink of an eye. For a while now, Sunnyvale has emerged as a luxury market holding its own with Silicon Valley sister, San Jose. Neck in neck in terms of keeping prospective buyers up at night is Escondido, one of San Diego County’s most sought-after spots. High prices aside, buyers now have about half the housing stock to pick from compared to last year, while homes in these three cities get sold in just 12 days or less.
At the other end of the spectrum, Southeastern cities like Jackson, MS, Birmingham, AL, and New Orleans, LA, keep homebuyers’ dark thoughts at bay. What makes house hunting an easier pill to swallow in these and a few other housing markets in the Sun Belt are home prices below the $420,000 national average, year-over-year price declines, and – in many instances – a pool of homes for sale on the rise since 2022.
Petrifying Prices: $1.1M+ in Bellevue, WA, Manhattan, & a Whole Lot of California; Prices in Louisville, KY Up by 25% Y-o-Y
It’s impossible to talk about what keeps house hunters up at night without mentioning home prices. With mind-boggling price tags well beyond the $1.1 million mark, 8 of the top 10 most expensive markets for homebuyers are in California.
For instance, living in Sunnyvale — one of the most competitive housing markets in the country — comes with a median price of more than $1,740,000 following an 11% price hike since 2022. The situation is pretty much just as dire in nearby Fremont where, despite a more optimistic 6% Y-o-Y decrease, the median price is closing in on $1,430,000.
Further north, in Bellevue, WA, the past year has brought about an 18% price increase. The high cost of living is often the reason that Bellevue is lumped with Seattle in terms of pricey options, but Emerald City ($810,000) is left in the dust by Bellevue’s $1,429,000 median price. Otherwise, Manhattan, NY, is the only other market outside of California that makes the skin on homebuyers’ wallets crawl due to a $1,140,440 median price.
In 3 of the 200 largest cities, homes are at least 20% more expensive now than they were last year, while 33 other markets had 10% to 20% Y-o-Y price boosts.
However, it’s large markets on the more affordable side that registered the highest price hikes in the past year. More precisely, in Louisville, KY, home prices are rising higher than a witch's broomstick on Halloween night, going from $242,500 in August 2022 to $303,375 in August 2023. Tallahassee, FL, and Kansas City, KS are next in line with 21% to 22% price increases. Yet, despite the jump, local median prices are still somewhat manageable, remaining below $300,000.
Inventory Ghost Town: 28 Markets Have at Least 50% Fewer Homes for Sale Compared to 2022
The near-historic housing shortage is making it especially hard to land a home. With more people wanting to buy than available homes for sale, inventory plays a crucial role in homebuyers’ chances. According to Freddie Mac, hope is as dwindling as the housing stock itself because “At the current sales rate, the inventory of new homes represents a supply of 7.3 months.”
As such, homebuyers are now faced with a more severe shortage of available homes. In fact, 28 of the markets analyzed have between 50% and 62% fewer homes up for sale compared to this time last year. In particular, California’s Fremont, Sunnyvale, and Fontana, have housing stocks about 60% smaller. In the same vein, house hunting is not for the faint-hearted in Spring Valley, NV, Chandler, AZ, and Gilbert, AZ, either: In these markets, there are 58% fewer homes to pick from this year compared to 2022.
Haunted by Competition: With Listings Disappearing in a Matter of Days, Some Locations Are More About Timing, Timing, Timing
Patience is a virtue, but homebuying might not be for the patient ones. So, to avoid watching their dream home get snatched up from right under their nose, aspiring owners must move as fast as the market.
The number of days on the market (or DoM) refers to each day that an active listing remains unsold. In this case, a number way too high might signal an undesirable listing or market, whereas a very low number represents high demand and listing after listing slipping through their fingers.
As a testament to current demand, active listings last less than two weeks in many of the 200 markets analyzed. In more extreme cases, buyers have around 6 days to get their hands on a home, which is how many days listings in Grand Rapids, MI, and Lakewood, CO, last on the market. With both of these markets experiencing intense competition, homes may get sold over a single weekend, so time – like money – is of the essence.
In Wichita, KS, Fayetteville, NC, and Fort Wayne, IN — cities with median home prices of $220,000 and under — homes are sold in one week’s time. Likewise, despite the steep median prices, homes in dynamic markets like Bellevue, WA, Fremont, CA, and Sunnyvale, CA, get sold in less than 10 days.
It's Not All Doom & Gloom: Jackson, MS, Birmingham, AL, & New Orleans, LA Least Scary for Homebuyers
As the housing market overall struggles to find its footing, it’s not all doom and gloom. Southeastern cities Jackson, MS, Birmingham, AL, and New Orleans, LA, ranked as the least scariest markets for homebuyers in 2023.
More manageable prices, year-over-year price declines, and a housing stock that still offers viable options make a few of the 200 largest U.S. cities easier to navigate than others. As a matter of fact, compared to 2022, median home prices declined in 57 major markets and stagnated in three others. For example, in Shreveport, LA, and Birmingham, AL, home prices dropped about 21% since last year. Similarly, limited inventory is less of an issue in New Orleans, LA, where there are 55% more homes for sale.
Detroit, MI — as well as Ohio’s Toledo, Cleveland, and Akron — are less horrifying in terms of median home prices. However, despite price declines, the cities are far from being buyers’ markets, with Detroit inventory struggling and the OH markets’ housing stock diving by more than 23% in a year.
Granted, these buyer concerns are terrifying on their own, and even more so when accumulated. But the truth is that they only scratch the surface of how scary the American housing market has become for most. Add market shifts akin to horror movie plot twists, ever-changing interest rates and housing policies, and this Halloween punch gets more and more bitter.
Point2, a division of Yardi Systems Inc., covers real estate trends and news. Point2 studies are based on internal data, public records, governmental sources, online research, and other reliable third-party agencies.
- For this study, we considered the 200 largest markets in the United States by population based on 2021 Census Estimates. New York City was split into the five boroughs.
- The study focuses on metrics sourced at city level. Sources include Redfin, Zillow, Realtor, PropertyShark, and Local MLSs.
- To determine The Scariest Markets for Homebuyers, the report uses a combination of ranking scores and equally weighted averages of four metrics:
- Median Home Price (August 2023);
- Home Price Evolution (percentage difference between August 2023 and August 2022);
- Y-o-Y Change in For-Sale Inventory (percentage difference between August 2023 and August 2022);
- Days on Market (August 2023).
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