- A decline in mortgage rates gave home sales a slight boost from December 2018 to January 2019, but the housing market is likely to slow this spring.
- Though the supply of homes has increased, prices remain high in many popular markets.
- In many other real estate markets, sellers are slashing home prices.
The U.S. housing market is going to be the coolest it’s been in years, according to Realtor.com. The trend is national, and many prominent housing markets are showing signs of the impact. While the supply of homes for sale is rising, there are fewer people who can afford to buy them. That means springtime, which is typically a busy period for selling homes in most areas, could be much slower this year.
The slowing of the housing market is noticeable when you look at inventory — the supply of available homes — compared with last year. For example, in Seattle, the number of homes for sale in January 2018 was only 492, according to Redfin. A year later, the number had shot up to 1,217 homes for sale. San Diego saw a large increase, too, from 1,736 homes for sale in Jan. 2018, up to 2,593 available homes in January 2019.
Housing Markets With Biggest Price Cuts
Prices have been slashed in a number of housing markets as a result of affordability issues; the trend is happening on both a state-level and city-level. For example, Nevada has seen a massive increase — 11.77 percent — in the percentage of listings with price cuts within the last year; in January 2018, around 10 percent of homes had price cuts, but in 2019, that number had shot up to nearly 22 percent.
At the state level, behind No. 1 Nevada are Washington, California, Utah and Colorado. And cities in Washington, California and Utah have experienced increasing price cuts — along with many other states.
Here’s a look at the recent housing markets with the greatest price cuts:
Housing Markets With Greatest Price Cuts in 2018 and 2019
|City||State||Metro||Percentage of Homes With Price Cuts: January 2018 ||Percentage of Homes With Price Cuts: January 2019 ||YOY Change in Percentage of Homes with Price Cuts|
|Lake Forest||Calif.||Los Angeles-Long Beach-Anaheim||6.5||28.6||22.0|
|Clark||N.J.||New York-Newark-Jersey City||12.5||32.9||20.4|
|Weehawken||N.J.||New York-Newark-Jersey City||7.2||27.6||20.3|
|Fresno||Texas||Houston-The Woodlands-Sugar Land||8.0||27.6||19.6|
|Red Oak||Texas||Dallas-Fort Worth-Arlington||5.5||24.6||19.1|
|Greater Northdale||Fla.||Tampa-St. Petersburg-Clearwater||13.8||32.5||18.7|
|North Druid Hills||Ga.||Atlanta-Sandy Springs-Roswell||12.4||30.7||18.3|
|Seal Beach||Calif.||Los Angeles-Long Beach-Anaheim||6.8||24.9||18.0|
|Lithia Springs||Ga.||Atlanta-Sandy Springs-Roswell||4.6||22.5||17.9|
|Millcreek||Utah||Salt Lake City||4.6||22.0||17.4|
|Long Valley||N.J.||New York-Newark-Jersey City||8.9||26.0||17.2|
|Claremont||Calif.||Los Angeles-Long Beach-Anaheim||7.4||24.5||17.1|
|Paine Field-Lake Stickney||Wash.||Seattle-Tacoma-Bellevue||2.5||19.5||17.0|
Texas is well represented in this list, with one city — Crowley — seeing 27.9 percent of homes getting price cuts in January 2019, up more than 20 percent since last year. New Jersey, too, has several cities in this list: Clark and Weehawken, in the New York City metro area, have seen the proportion of homes with price cuts jump by more than 20 percent as well.
Take Advantage of Cooling Markets
While cooling housing markets can be somber news for the overall economy, individual Americans can take advantage of the situation. With mortgage rates down, thanks to a stable Federal funds rate, you can double down on savings by targeting markets with significant price cuts.
Consider some of the biggest metro areas to see significant price cuts include:
- Las Vegas: 23.9 percent of homes have had a price cut in the last year.
- San Diego: 20.3 percent of homes have had a price cut in the last year.
- Seattle: 14.2 percent of homes have had a price cut in the last year.
- San Jose: 13.2 percent of homes have had a price cut in the last year.
With housing markets cooling, the balance of power could be shifting toward buyers instead of sellers. So, 2019 could be an ideal year to buy a home, especially if you’re a first-time homebuyer.
Find out the salary you need to afford the average home in your state.
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This article originally appeared on GOBankingRates.com: Why a Slow Spring Housing Market Could Be a Boon for Buyers