Seattle The Fastest-Cooling Housing Market in the Country

Posted by Cary W Porter on Wednesday, October 5th, 2022 at 9:02am

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As real estate and real estate-related companies continue to cut their workforces, it's become clear that it's no mirage -- the housing market is indeed cooling. Another sign? The real estate giant Redfin has experienced a nearly 92% drop in stock value since last year.

While homes are still more expensive today than they were before COVID-19 changed the world, demand is slowing, and prices are dropping. Redfin recently released data showing which markets are cooling at the fastest rate. What was a seller's market is quickly flipping to a buyer's market in these areas of the country:

Rank

Metro Area

Median Sale Price

1

Seattle, Washington

$774,950

2

Las Vegas, Nevada

$416,000

3

San Jose, California

$1,375,000

4

San Diego, California

$800,000

5 (tie)

Sacramento, California

$575,000

5 (tie)

Denver, Colorado

$570,000

7

Phoenix, Arizona

$455,900

8

Oakland, California

$910,000

9

North Port, Florida

$450,000

10

Tacoma, Washington

$543,000

11

Austin, Texas

$500,000

12

Raleigh, North Carolina

$435,000

13

Cape Coral, Florida

$392,000

14 (tie)

Stockton, California

$550,000

14 (tie)

Portland, Oregon

$535,000

16

Bakersfield, California

$350,000

17

Jacksonville, Florida

$365,000

18

Tampa, Florida

$377,000

19

Orlando, Florida

$391,778

20

Dallas, Texas

$430,000

Data source: Redfin

Rising interest rates

The most apparent reason for cooling markets is rising interest rates. The Federal Reserve raises interest rates in response to inflationary concerns. The higher the rates, the fewer people compete for the same asset (in this case, housing). Fewer buyers competing for housing means fewer bidding wars and softer prices.

As an example of how rising interest rates have cooled buyer enthusiasm, we'll look at Austin, Texas. A year ago, if a buyer purchased a $500,000 home in the city, their principal and interest payment would be $2,108 per month, thanks to an interest rate of 3%. Today, that same mortgage would carry a rate of around 6%, and the monthly principal and interest payment would be $2,998. The jump in payment is enough to make some buyers ineligible for a mortgage and others hesitant to jump into the fray.

Fall Housing Market Predictions For 2022

After a tumultuous summer for real estate, autumn is nearly here. As of mid-September, the benchmark 30-year fixed-rate mortgage average is hovering just north of 6 percent, and skyrocketing home prices are finally starting to drop, and in some area literally tumble.

Here are our prediction on which directions the housing market will head in as the leaves start to change.

The Housing Market Is About to Be Hammered

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