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22.9% Of US Housing Markets
Currently, 93 markets (22.9% of all U.S. real estate) experienced ‘real’ (inflation adjusted) declines in property values compared to the prior Quarter.
For the same period last year 62 markets (15%) saw Q-O-Q declines.
Note: Because of seasonal variations between quarters, it’s best to compare Q-O-Q changes to the ‘year ago’ period rather than the immediately preceding quarter.
(See the entire list of declining markets below.)
After several quarters of strong price appreciation almost across the board, it was surprising to see this quarter’s list of declining markets jump to almost 23% of all major US markets. It could be an early indication the “Pandemic Effect: Phase I” is ending… housing inventory may be coming back online now that mobility is coming back.
We may be seeing a restart or continuation of weakness in those same markets that started rolling over just before the pandemic hit.
It will be interesting to see if the “Pandemic Effect: Phase II” materializes… a massive exodus and home price declines in big, expensive, congested urban markets.
In addition to the list of declining cities below, we also use our Advance-Decline (A-D) Indicator that aggregates and tracks Market Breadth.
Market breadth is a study used in Technical Analysis that attempts to gauge the direction of the overall market by analyzing the number of markets advancing relative to the number declining.
Changes in Market Breadth can act as early indicators for changes in the market cycle.
chart looks like for ALL U.S. Real Estate Markets...
The BLUE line is the inflation adjusted overall appreciation rate for the average of all U.S. real estate markets (as read from the right axis).
The RED line is the percentage of all U.S. real estate markets that have increased in value on a quarter-over-quarter basis, averaged over the last 4 quarters (as read from the left axis).
As with all Quarterly vs. Annual comparisons, you’ll see more variance with shorter time frames. It’s common for this red line to fluctuate up and down.
This A-D Indicator can also be used on State and Regional levels for more granular insights. PRO level members can customize this indicator by logging in and visiting the ‘Advance-Decline’ tool.
Below is the list of cities with
declining Quarter-Over-Quarter home prices…
Note: These are 3-month percentage decline rates.
Multiply by 4 to get approximate annual equivalent (at current run rate).
There seems to be a war between all the talking heads and real estate gurus out there about which direction the market is headed.
Half the so-called experts are still calling for a massive market crash. It’s the same Chicken Little blabber they’ve been pushing for years.
Now they’re pointing to all the forbearance properties hitting the market as the next big reason for home prices to fall.
Seems they never run out of reasons to call for a crash, but practically never get it right.
In the other corner, we have the eternal market bulls who’ve been predicting an endless up cycle for real estate because of inventory shortages, low rates, rising Millennial demand and now, the “virtual office” paradigm shift with ‘everyone’ setting up home offices and moving into lower priced, more appealing suburbs and beyond.
These major fundamental jolts can and do impact the price of real estate on a market-by-market basis, but trying to GUESS what the impact will be on ANY local market is the wrong approach.
For example, If the ‘zoom effect’ sticks around post-pandemic, we may very well see a migration out of big, expensive real estate markets. If and when that happens, you’ll be the first to see WHICH MARKETS get hit, and which might benefit – from inside HousingAlerts.
Likewise, for any forbearance-induced foreclosure spikes, you’ll see them coming from a mile away inside HousingAlerts!
HousingAlerts is the most accurate LOCAL real estate market analytics on the planet, for 15 years running.
If your markets are on this list, DON’T panic!
ONE data point, whether it’s for a Quarter or a Year, doesn’t necessarily mean it’s time to buy, sell or hold… or do ANYTHING different, other than pay closer attention. That’s where Technical Analysis (TA) comes in.
TA is a 500 year old science to help predict future market swings. TA is used by every Wall Street investment bank and every global stock, bond, currency and commodities trading firm on the planet for TRILLIONS of dollars in DAILY trades.
We invented TA for local real estate
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