According to a new Realtor.com report, among America’s 50 biggest cities, 20 show annual price declines since last year, and the metro with the steepest drop might surprise you. What markets are dropping the fastest and why? How accurate is the data they are using? Hint, I wouldn’t get too excited about the price drops!
What was in the data on declining real estate values?
Realtor.com analyzed the top 50 metro areas to determine the 11 fastest declining markets. The declines in prices are led by Miami with an 11.2% decline and Denver with a 6.3% decline.
How accurate is the data on declining real estate prices?
I was a bit skeptical at this report and the data is a bit misleading. Denver does not have a year over year decline. Look at the recent data from Zillow showing Denver basically flat year over year. Furthermore, the most recent data from the Denver Metro Association of Realtors shows an increase in the median price of 1.33% which is far from the 6.3% decline shown in the study.
To Realtor.com’s credit, Denver and Miami have declined from their peaks which is drastically different than claiming Denver is a declining market as the numbers tell a radically different story.
Should you be worried about Denver, Miami, and the other 9 markets?
Although Realtor.com’s study was misleading, cities like Denver and the others on the list are not out of the woods. Look at the chart below on Denver based on year to date until 7/1/24.
- Inventory up: 28%
- Listings up 12%
- Closings down 17%
The numbers above definitely point to trouble coming down the pipe. As inventory rises and closings decline, eventually prices will have to fall. Currently there is no distress in the market, but as the labor market softens there will be considerably more issues.
Summary
Although the realtor.com study was very misleading as places like Denver are not currently declining. The premise of the article will ultimately come to fruition as cities like Denver have big jumps in inventory while at the same time closings are declining. In essence, the Denver market and others on the list are basically flat now, but there are definitely big changes coming down the pipeline.
Additional Resources/Reading
- https://www.realtor.com/news/trends/home-prices-falling-cities-where-prices-dropped-most-past-year/
- https://coloradohardmoney.com/60-surge-in-denver-eviction-filings-heres-why/
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Glen Weinberg personally writes these weekly real estate blogs based on his real estate experience as a lender and property owner. I’m not an armchair reporter/writer. We are an actual private lender, lending our own money. We service our own loans and own commercial and residential real estate throughout the country.
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Written by Glen Weinberg, COO/ VP Fairview Commercial Lending. Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in Bloomberg, Businessweek ,the Colorado Real Estate Journal, National Association of Realtors Magazine, The Real Deal real estate news, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.
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