Amid Home Price Boom, Some Markets Different

With all the talk (including here) about the national surge in home prices over the past several years, it’s important to remember that real estate is local. And for some localities, median home listing prices are flat–or in some cases, falling.

But that might not be a bad thing. Data from Trulia, San Francisco, showed despite low housing inventories in most parts of the country, which in turn have driven up home prices, some markets have listing prices that suggest a stagnant market.

David Weidner, managing editor of Trulia’s Housing Economic Research Team, said most of these markets come with a caveat or two. “Listing prices only examine what’s on the market compared to a year ago,” Weidner noted. “Home value estimates…are another indicator of a housing market’s strength. So, for instance, a market may see cheaper listings because newer cheaper homes have been built, but overall home values may still be rising.”

Indeed, the company’s list of places where prices either stalled or fell (https://www.trulia.com/blog/trends/10-markets-prices-falling/) include some markets normally associated with rising prices, low inventories and furious competition for listings. Among Trulia’s list of flat/falling markets:

—San Antonio. The good news for home buyers, the report said, is that the drop in listing prices probably resulted from cheaper homes hitting the market. Median home prices in San Antonio have risen by 9.4 percent over the past 12 months, higher than the 8 percent national median home value.

—Austin, Texas. Last year Austin issued 79.5 percent more building permits than its historic average, 40 percent of them high density, ranking second among the nation’s biggest housing markets. Competition remains fierce for housing in Austin, which has seen 6 percent job growth and an unemployment rate that has fallen to 3 percent.

—Honolulu. Trulia said the nation’s most expensive housing market has stabilized, with the median home value rising by just 7.5 percent.

—Camden, N.J. A chronically flat economy and higher-than-average unemployment hasn’t helped the housing market, where home values have risen by just 2 percent over the past year.

—Milwaukee. The only Midwest market on the list appears to be an anomaly, with strong employment and wage growth (the unemployment rate is just 3.2 percent).

—Sacramento, Calif. Listing prices fell last year despite overall home growth of 12.1 percent, “suggesting there’s more cheap housing on the market now,” Trulia said.

—Houston. Trulia described Houston, coming off of last year’s Hurricane Harvey, as “clearly a market in transition.” Despite a “deeply damaged” housing stock, Houston ranked second nationally in building permits issued last year with more than 42,000–before Harvey hit.

—Dallas. Another strong market, with unemployment at just 3.7 percent, job growth at 3.8 percent and wage growth at 3.2 percent. Trulia called Dallas the leader of the Texas building boom, with 47,000 permits approved last year. “Dallas’ willingness to build is offsetting any demand pressure in the market,” Trulia said. “Median home values rose 15 [percent], suggesting that much of the new housing is cheaper.”

—Sarasota, Fla. Trulia cited Sarasota as a “stable” market, with home values up by 7.5 percent and strong wage and job growth, with an unemployment rate of just 3.5 percent.

—Denver. Despite double-digit home value growth (11.2 percent), Trulia said new housing appears to be the key here for this town with low unemployment, better-than-average wage growth and strong job growth. Denver issued more than 22,000 building permits last year, 40 percent more than its historical average.