U.S. home values continued to grow on a year-over-year basis in October but declined from where they were in September, according to property analytics firm CoreLogic.
From October 2021 to October 2022, home values jumped 10.1% nationwide. However, prices in October slid 0.1% compared with where they were in September.
After years of soaring home prices, a few U.S. markets are especially vulnerable to price declines, CoreLogic says. Following are the places in the greatest danger of slipping during the next 12 months.
Salem, Oregon
This housing market’s likelihood of a price decline over the next 12 months: Very high (more than 70% probability)
Higher mortgage rates are making homes in Salem less affordable. In October, the mortgage payment on a median-priced home in Marion County cost $2,575 a month for principal and interest after a 20% down payment.
A year earlier, a median-priced home would have cost just $1,473 a month, thanks to lower mortgage rates.
Tacoma-Lakewood, Washington
This housing market’s likelihood of a price decline over the next 12 months: Very high (more than 70% probability)
At the end of September, we noted that Tacoma was among the “10 Housing Markets That Are Cooling Fastest.”
After a recent release of home sales data from the Northwest Multiple Listing Service, Dick Beeson, managing broker at RE/MAX Northwest in Tacoma/Gig Harbor, said:
“The data show we’re in a changed market. High interest rates, doubled inventory levels, anxious lenders, contracts written with negotiations for repairs, closing costs, and other sundry things — all of these have returned to the market.”
Crestview-Fort Walton Beach-Destin, Florida
This housing market’s likelihood of a price decline over the next 12 months: Very high (more than 70% probability)
In May, Destin, Florida-based real estate agent Jodi Ketchersid temporarily exited the real estate market to tend to family matters, according to website RealTrends.
When she returned to selling homes in late summer, she was startled by the changes she saw: “It was like, ‘Holy cow! What happened to the market?’”
Both prices and activity have cooled considerably. As Ketchersid told RealTrends:
“The average number of days on market now is getting closer to 90 days as opposed to like 24 hours, and we aren’t getting those countless multiple offer situations anymore.”
Bremerton-Silverdale, Washington
This housing market’s likelihood of a price decline over the next 12 months: Very high (more than 70% probability)
By the second quarter of this year, home flipping rates were very low in Bremerton, suggesting that the market was cooling.
CoreLogic says this market now is in great jeopardy of a price correction, which might bring some relief to folks who have been priced out of buying a home.
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Bellingham, Washington
This housing market’s likelihood of a price decline over the next 12 months: Very high (more than 70% probability)
The number of million-dollar homes in Whatcom County — where Bellingham is located — has doubled since 2019. Now, less than half of owner-occupied homes in this area of northwestern Washington state are valued at less than $500,000.
But those sky-high prices might be dropping back to earth soon, CoreLogic says.