Now it takes Read: When Wall Street is your landlord. But the aggregate numbers make the decrease in access to the real-estate market seem gradual, albeit troubling, and underplay the spikiness of the country. In Los Angeles, it would take 43 years to save up for a down payment. In San Francisco, In San Jose and San Diego, In Seattle and Portland, 27 and 23, respectively.
In the east, New York and Miami topped the list, requiring 36 years to save up that down payment. Only Detroit, at seven years, was under the national average from Generationally, this has huge consequences. For young people in high-opportunity metro areas, the route to home ownership is basically blocked without the help of a wealthy family member or some stock options. Meanwhile, older people who bought under much more favorable circumstances have seen their equity stakes grow and grow and grow. One part of the problem is easy to identify: housing scarcity.
The Bay Area has become the poster child for this factor. More than half a million jobs were created from to , but only 76, housing units were built. The simplest way to read these numbers is that the real-estate market in job-rich cities like San Francisco does not work for the vast majority of young people. Policies—such as changes in restrictive zoning or building lots of new multifamily units—that could lower home prices are promoted heavily by younger people, who would like to participate in a less insane real-estate market.
At the same time, many homeowners, and the city officials they elect, see propping up real-estate values as what the government does. The economy killed Millenials.
And then, of course, there is the fact that even as old-fashioned biological explanations of racial hierarchy fell out of fashion, white homeowners continued to pass and uphold racist housing policies, by shifting their rationale to property values, as David Freund showed in his book Colored Property. Many of these policies served to restrict the number of affordable homes. So, now, decades later, in many cities with good economies that have drawn new residents, increased demand has not been met with commensurate supply. Little more than a year ago, unstoppable home price increases seemed to be the new normal just about everywhere.
Go, go, go! It was a never-ending party for sellers, and mass anxiety for price-squeezed buyers. But then last fall came signs of a housing slowdown, as big-city prices began to level off—or in some markets actually drop. Was a housing bubble about to burst? Well, not quite. Nationally home prices still rose 6. But here's the thing: That's actually the lowest price growth in five years. And according to the latest data, 1 in 5 metropolitan areas is now seeing decreases in home prices, compared with half as many a year ago.
So what are the places moving from a seller's market to a buyer's?
The realtor. They are dropping out, and that's why we're seeing prices adjust [down] in some markets. There are some surprises on this list—including some of the highest-profile markets in the country hello, San Francisco Bay Area! It turns out there is a limit to how high home prices can go, even in some of America's most alluring, if overheated, places. Some markets are seeing price drops due to overbuilding: This creates too much supply and not enough demand, so prices naturally fall.
And just like in past years, in other areas, natural disasters devastated lives, communities, and local real estate. It can boost home prices and rents in unaffected pockets as locals compete for housing. But it can also hurt an area's image as folks don't want to suffer through another disaster.
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To figure out where prices are down the most, we looked at the change in median list prices on realtor. And we limited the ranking to no more than three metros per state. Yes, you read that right. Perennial hottest market in the U. For the past few years, home prices in this city at the heart of Silicon Valley have soared at double-digit rates.
But last fall, red flags started to appear.
Now prices are plummeting faster than anywhere else in the U. Time for a quick reality check: None of this means that San Jose has become a bargain. It's still America's most expensive real estate market. But therein lies the problem—prices just shot up too high.
And even in the San Francisco Bay Area, what comes up must come down.
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Federal tax law changes also played a role. Plus, the amount of mortgage interest deduction folks can write off on their taxes was reduced. In pricey areas like San Jose, that can translate into a big financial hit. This has led dwellings to sit longer on the market, climbing from a median 19 days to 27 from April to April At the time it was the largest wildfire in California history.
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And that was just the beginning of the widespread damage—the conflagration damaged ground soil and tree roots, leading to mudslides that wiped out still more homes. In the disaster's wake, some displaced victims left the area altogether instead of going through the long, painful process of rebuilding.
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Others who were thinking of moving to the area changed their plans altogether. With high prices, mortgage rates, and the tax changes, many stayed on the sidelines, lessening demand in the area. But builders in pro-development Texas went a bit overboard in recent years. That resulted in a glut of new homes in this market two hours northwest of Houston, pushing inventory up Eventually, investors are expected to snap up many of these properties and rent them out to students.
But it also means buyers have options.
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So they can take their time finding the right one—and then negotiating the price down. Folks here can snag a new home for a bargain compared with those in bigger cities such as Austin and Dallas. Prices are sky-high in this golden metro encompassing all of wealthy Fairfield County , home to some of the toniest enclaves just outside of New York City. That's because the state has some of the highest property taxes in the nation—and now homeowners can't write off nearly as much. Plus, many of the affluent buyers who might normally head for Fairfield County may be choosing to go to Manhattan instead.
That's because the city has had an influx of new, luxury towers going up in recent years—including the flashy, massive development Hudson Yards. The cooling in the Bridgeport metro has helped push inventory up 8.