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10 Markets Where Home Prices Now Are Falling

Home in Los Angeles
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After rising to astronomical heights, housing prices are beginning to fall in some parts of the country.

To be sure, there is no sign that home values are about to repeat the disastrous decline that spun off the Great Recession more than a decade ago. At least not yet.

But in some cities, seller asking prices now are falling, according to Realtor.com.

Thanks to the years-long runup in prices, home affordability is near its lowest point ever. But with mortgage rates suddenly topping 5.5%, it is possible that change is on the way.

Following are the markets that Realtor.com says are seeing the largest listing-price declines.

10. Richmond, Virginia

Richmond Virginia homes
Noel V. Baebler / Shutterstock.com

Median listing price change: -3.4%

New median listing price: $310,000

In Richmond — as with many other cities on this list — there may be more to lower listing prices than meets the eye.

Local real estate agent Jenny Maraghy tells Realtor.com that underpricing homes in Richmond is often merely a marketing ploy:

“If I know I’m going to get $325,000 for a house, I’m likely going to price it at $299,000 and let it ride the market. The biggest mistake we can make [here] is overpricing.”

In addition, there has been a surge of smaller homes coming onto the market, and that might be driving asking prices lower.

9. Chicago

Homes in Chicago, Illinois
Mark Baldwin / Shutterstock.com

Median listing price change: -3.7%

New median listing price: $399,000

Although home sales have boomed for some time in Chicago, the condo market has lagged for a while.

Data from the Illinois Realtors Association suggests that such underperformance is dragging down housing prices as a whole. While single-family homes sit on the market for 61 days, it takes 99 days to sell a condo. And condo sales make up two-thirds of all city homes sold in a typical month.

8. Memphis, Tennessee

Homes in Memphis, Tennessee
Steven Frame / Shutterstock.com

Median listing price change: -4.6%

New median listing price: $173,500

Until very recently, the market was soaring in Memphis. But a slew of new homes — including smaller, more affordable properties — have entered the marketplace, Realtor.com says. That has driven down asking prices in a market that was among the most overheated in the U.S.

For more on overpriced markets, check out “The 10 Most Overpriced Housing Markets in the U.S.

7. Los Angeles

Los Angeles neighborhood in San Fernando Valley
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Median listing price change: -5%

New median listing price: $985,000

Way back in the second week of March, Google searches for Los Angeles “homes for sale” were down by double digits year-over-year. Perhaps it was a sign of things to come.

Local real estate agent Rafael Oseguera tells Realtor.com:

“I’m seeing a lot of (contract) cancellations by the time interest rates have been locked into place. We are starting to see some home values taper off.”

6. Tulsa, Oklahoma

Home in Tulsa, Oklahoma
Vineyard Perspective / Shutterstock.com

Median listing price change: -5%

New median listing price: $220,000

Factors ranging from higher mortgage rates to growing levels of inventory are pushing prices lower in some markets. But the sudden appearance of more entry-level homes for sale also is causing median asking prices to fall in many markets.

Tulsa is a good example of a market where this is happening, Realtor.com says.

For those worried that the housing market is a bubble ready to pop, it might be reassuring to note that in many places, median asking prices are coming down simply because these small, low-priced homes are now for sale.

That suggests a better outlook than if sellers were lowering prices out of desperation to make a sale. But as always, time will tell.

5. Springfield, Massachusetts

Springfield, Ohio
Rick Weber / Shutterstock.com

Median listing price change: -5.8%

New median listing price: $239,900

As smaller homes come to market in Springfield, the median price is dropping. The good news for homeowners is that prices per square foot are holding their own.

The bad news? Realtor.com notes that Springfield attracted a lot of Boston residents during the COVID-19 pandemic, causing prices to soar far beyond their station. As a result, Springfield is in grave danger of a true correction, according to Realtor.com, which cites CoreLogic data for that conclusion.

4. Pittsburgh

Steve Heap / Shutterstock.com

Median listing price change: -13.7%

New median listing price: $230,000

The first Rust Belt city on this list — but not the last — has seen some buyers scared off by higher mortgage rates, Realtor.com says.

In addition, a growing number of landlords in the city appear to be ready to sell, and the fact that those more affordable properties now are coming to market is driving down median asking prices further.

3. Detroit

Detroit, Michigan
Stephanie Kenner / Shutterstock.com

Median listing price change: -15.4%

New median listing price: $75,000

Just a couple of weeks ago, it appeared the Motor City’s housing values were holding firm. But higher mortgage rates are pricing out some locals, according to Realtor.com.

Couple that reality with the fact that the number of new listings jumped 6.7% year-over-year in March, and you have a recipe for falling prices.

2. Rochester, New York

Home in Rochester, New York
Hank Shiffman / Shutterstock.com

Median listing price change: -17%

New median listing price: $149,900

For more than two years, the market in Rochester was red hot. But it was largely a lack of inventory that pushed up prices, Realtor.com says.

Now, more inventory is for sale — as with Pittsburgh, possibly from owners of rental properties hoping to cash in while they can — and that has caused prices to slip.

1. Toledo, Ohio

Toledo, Ohio
Stiver / Shutterstock.com

Median listing price change: -18.7%

New median listing price: $115,000

Somehow, it doesn’t seem fair that Toledo is seeing prices decline sharply in what was already a market with median values far below the national average.

But a city’s economy largely dictates the fate of its housing stock, and as Realtor.com notes, Toledo has seen decades of job losses. That includes the closure of a Jeep Cherokee plant a few years ago that resulted in pink slips for 3,700 workers.

Are you planning to buy a home soon? Stop by the Money Talks News Solutions Center and search for a great mortgage rate.

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