Home prices in the west have experienced a significant drop of about 10% since reaching their peak in April 2022. However, despite this decline, prices in the region remain higher compared to 2019 levels. The west has been particularly affected due to its substantial increase in home prices during 2021 and 2022. Approximately 77% of the western region has witnessed a decrease in prices from the pandemic-induced high.
In contrast, the housing markets in the Northeast and Southeast have managed to maintain stability. Nicholas Gerli, the founder and chief executive of Reventure Consulting, attributes this resilience to the absence of overvalued homes in these areas. He stated that inventory levels are alarmingly low, contributing to the current situation. For instance, in Hartford, Conn., home prices have even risen by 8% compared to the previous year.
Smaller markets, known for their affordability, have been able to retain and, in some cases, increase their home values despite the rise in mortgage rates. Lawrence Yun, the chief economist at the National Association of Realtors, pointed out that out of the top ten housing markets with the highest price appreciation in the past year, seven of them have an average home value of less than $300,000.
The current trend suggests that while the western region experiences a decline in home prices, other areas have managed to weather the storm. The availability of reasonably priced homes and the strong demand in smaller markets have helped maintain their value. However, the overall inventory shortage and rising mortgage rates continue to pose challenges to the housing market, warranting close attention from industry experts and potential buyers alike.
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