In the last few years, as a result of the coronavirus pandemic mortgage rates fell and home prices across the country went up, creating a red hot, competitive real estate market in many cities.
Now, mortgage rates have risen to the highest they've been in a decade. But in many markets, home prices still haven't budged and many would-be buyers are priced out.
"You really have to assess if this is the right time for you to buy or move into a new home and get a mortgage," said Sharon Opperson, CNBCSenior Personal Finance Correspondent.
A new report around home buying though, shows that in some metro areas, including Chicago, prices are falling -- and now may in fact be the right time.
According to a recent study from Realtor.com, Chicago ranks on a top 10 list of metro areas where home prices are down the most compared to this time last year.
"An overabundance of condo buildings downtown is one factordragging downprices in the metro area," the report says. "There are at least 6,000 units on the market right now."
According to the report, Chicago has a median list price of $399,000, down 3.7% over the previous year. That's the second highest median list price on the report -- the highest median list price belongs to Los Angeles, at $985,000.
The metro area where home prices that saw prices go down the most, according to the report, was in Toledo, Ohio.
On the list of 10, with 1 being the metro area where home prices had fallen the most drastically, Chicago ranked 9th.
Here's the full list:
Number 1: Toledo, Ohio
- Median listing price: $115,000
- Median listing price change: -18.7%
Number 2: Rochester, NY
- Median listing price: $149,900
- Median listing price change: -17.0%
Number 3: Detroit, MI
- Median listing price: $75,000
- Median listing price change: -15.4%
Number 4: Pittsburgh, PA
Median listing price: $230,000
Median listing price change: -13.7%
Number 5: Springfield, MA
- Median listing price: $239,900
- Median listing price change: -5.8%
Number 6: Tulsa, OK
- Median listing price: $220,000
- Median listing price change: -5.0%
Number 7: Los Angeles
- Median listing price: $985,000
- Median listing price change: -5.0%
Number 8: Memphis, TN
- Median listing price: $173,500
- Median listing price change: -4.6%
Number 9: Chicago, IL
- Median listing price: $399,000
- Median listing price change: -3.7%
Number 10: Richmond, VA
- Median listing price: $310,000
- Median listing price change: -3.4%
Realtor.com says it looked at the year-over-year median list prices in the 100 largest metros (limiting to just one metro area per state) in March to determine the ranking.
FAQs
Among the metros evaluated, prices declined at a sharper rate in the West. San Francisco took the lead, with home prices there down 13% in December 2022 from their peak, Black Knight data showed. This was followed by San Jose ( down 12.7%), Seattle (down 11.3%), and Phoenix ( down 10.5%).
What cities in the Bay Area have the biggest decline in home prices? ›
According to the report by investment advising company SmartAsset, San Francisco was the largest city in the top 10 list for price reductions, with home values falling by 13% from 2022 to 2023. Palo Alto and Dublin saw similar declines.
Are home prices dropping in Chicago suburbs? ›
As of March, prices in the suburbs had flatlined compared to the previous year, with the median price settling at $310,000. Within the city limits, however, the drops have been much larger. The median price in April was $340,000, down 8.1 percent from $370,000 in April 2022.
Are housing prices going down in Chicago? ›
Median Sold Price
Homes in Chicago have sold for 3.1% less than they did a year ago. Summary: The median home sold price in Chicago was $337,800 in August 2023, down 3.1% from last year, and the median price per square foot was $240.
Where are housing prices plunging the fastest? ›
Realestateagents.com put the Bay Area at the top of their list for "fastest dropping real estate values" in the nation based on data from the National Association of Realtors with San Francisco, Oakland and Hayward snagging the top spot, and San Jose, Sunnyvale, Santa Clara region coming in second.
Where are housing prices dropping the fastest? ›
Prices in Western States Decrease the Most
- Idaho: -8%
- Washington: -7.5%
- Nevada: -5.6%
- Montana: -5.3%
- Utah: -4.3%
- Arizona: -4.2%
- California: -3.5%
- Oregon: -3.1%
In a recent note to clients, the strategists warned that by the end of 2024, home prices are set to plunge by 19% in Austin, 16% in Phoenix, 15% in San Francisco and 12% in Seattle. That's because those four cities have seen large increases in inventory, and supply is now overwhelming demand.
Which cities have biggest housing shortage? ›
Our analysis suggests that San Antonio, Dallas, and Orlando, as of 2Q 2023, have the most constrained housing supply as buoyant labor markets continue to attract people to these cities. On the flip side, St. Louis, Detroit and Miami seem to have the highest housing stock relative to their population.
Will houses get cheaper in Bay Area? ›
Bay Area Housing Market Forecast 2023-24
It's possible that prices can dip lower if local economic conditions deteriorate, but it appears that prices are beginning to level out. While homes are selling for less, the Bay Area remains a seller-friendly market as inventory is limited.
Will home prices drop in 2023 Chicago? ›
Forecast for 2023-2024
The 1-year forecast suggests a slight decline (-0.8%) for the next year primarily due to less demand and higher interest rates. Demand is still quite strong, resulting in 28.7% of homes selling above the listing price. As a place to invest, Chicago can still be a good choice.
As per Zillow's Illinois housing market forecast, the national Zillow home value index rose by 4.4% in March 2023. Over the next year, it is expected to rise by 0.6%. NAR predicts 4.78 million existing home sales in 2023.
Why are homes in Chicago so cheap? ›
Unlike other major cities that have limited space for new construction, Chicago has a vast inventory of existing housing stock. This means that there are more homes available for purchase or rent, which creates more competition among sellers and landlords, leading to lower prices.
Is Chicago property a good investment? ›
The Chicago real estate market is a solid buy for investors who are looking for a sizable opportunity and have the pocketbook to support the initial investment. Take a look at some of the statistics about the area's rental market as of January of 2022.
Is there a housing crisis in Chicago? ›
Chicago's homeowners are not immune to the city's affordable housing crisis. Though house price growth started to slow during the second half of 2022, pandemic gains have left prices much higher than they were a few years ago.
What is the Chicago housing market like right now? ›
The Chicago housing market is somewhat competitive. Homes in Chicago receive 3 offers on average and sell in around. The median sale price of a home in Chicago was $340K last month, up 4.6% since last year. The median sale price per square foot in Chicago is $251, up 7.7% since last year.…
What states is the housing market going down? ›
Nevada home prices saw the biggest decrease between June and November 2022, falling 4.8%. The average cost of a house in Nevada is 22% higher than the national average. Prices are also falling in other parts of the West — including Arizona, California, Oregon, Washington, and Utah.
Which cities have the worst housing shortage? ›
Our analysis suggests that San Antonio, Dallas, and Orlando, as of 2Q 2023, have the most constrained housing supply as buoyant labor markets continue to attract people to these cities. On the flip side, St. Louis, Detroit and Miami seem to have the highest housing stock relative to their population.
Are housing prices plunging across the US? ›
The decline since July of last year was 16.6 percent. The nationwide median sale price in July 2023 was $407,600, the highest July median NAR has ever recorded. July saw a 3.3-month supply of housing inventory, up slightly from June but still well below the 5 to 6 months needed for a healthy, balanced market.
