Cities Where Home Prices Are Dropping

By Douglas A. McIntyre Published Sep 4, 9:30AM EDT

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Cities Where Home Prices Are Dropping — © bluejayphoto / iStock via Getty Images

Home prices have skyrocketed higher for most of the last two years. In some markets, prices have risen by sums well into the double digits.

There are several reasons for the increase. The first is that low interest rates have made housing more affordable. The rates on 30-year fixed mortgages dropped below 3%.
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Another reason for the rise in some cities is that Americans became more mobile during the COVID-19 pandemic. People who could work from home often migrated from expensive coastal cities like New York and San Francisco to cities inland which included Boise and Memphis. Since many people can work from home permanently, this migration may continue.

The dynamics of the housing market have changed recently. Interest rates on mortgages have soared to over 5%. Home prices have risen so high in some cities that they are no longer affordable.

One of the gold standards of the home price market is the S&P Case-Shiller index. It has shown that most months this year, national home prices have risen 20% a month, year over year. In several markets, led by Tampa, Miami, and Phoenix, the figure has been above 30% some months.

Month over previous month in June several home markets began to see erosion in home prices. In June 2022 over May 2022, national home prices rose 0.6%. Two markets remained very strong. For the period, Miami prices were up 2.3%. For Tampa, the figure was 2.2%.

The markets where homeowners were not so fortunate were San Francisco where they dropped 1.3% and Seattle where they dropped 1.9%. Traditionally, these two cities are among the most expensive in America.
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The question today is whether market prices will follow Seattle and San Francisco in the same direction. If so, the two year housing market boom is over.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.