Home Prices Have Dropped In Major Cities Like San Francisco
Home Prices Are Plummeting In Some Major Cities—Is Now the Time to Buy?
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If you have been waiting on the sidelines to buy a home, now may be the perfect time to make the plunge as home prices have steadily dropped in major cities like San Francisco, California, Nashville, Tennessee, Tampa, Florida, Kansas City, Missouri, and several other areas.
On Jan. 2, Realtor.com published its Monthly Housing Market Trends report, revealing that in December 2024, the median sales price for homes across the U.S. fell slightly to $402,502, down from $410,000 in 2023. While homeownership remains out of reach for many due to ongoing affordability challenges, there are still opportunities for prospective buyers in the market.
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San Francisco saw the biggest drop.
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In San Francisco, home prices experienced the steepest decline, dropping 10.9% year-over-year to a median price of $889,500. but it still remains expensive compared to other areas across the US. According to Wolf Street, last year single-family detached home prices in San Francisco averaged $1.39 million, a level not seen since 2019. Meanwhile, prices for condos and co-ops in the tech hub dropped 14.7% from their peak in May 2022, now averaging $986,000, which reflects prices from 2015. The steep drop was caused by a wave of tech layoffs that swept through the city last year.
To put things into perspective, between 2012 and May 2022, condo prices had doubled, but they have since fallen by 30%, a decrease of approximately $170,000, as reported by Wolf Street.
Miami, Austin, Tampa, and several other locations saw steep declines.
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On the East Coast, Miami and Austin saw significant drops of 9.9% and 7.7%, respectively. Tampa also reported price reductions in several months throughout 2024, dropping to $395,000 (-6%). In Orlando, the median home price dropped to $419,950 in December, a decrease of 4.3%. According to the Orlando Regional Realtor Association, the decline was attributed to rising interest rates throughout 2023, which followed the historic lows seen during the pandemic. By 2024, both buyers and sellers adjusted to the current rate environment and returned to the market to secure homes. Interest rates remained steady at around 6.0% for most of the year, with the average rate for 2024 settling at 6.5%.
In the midwest, Cincinnati followed closely with a drop of 4.8%, bringing the median price to $319,050, while Kansas City homes plummeted to $369,995 (-7.5%), Realtor.com reported. Back out west, Phoenix experienced a 5.1% decline, with homes now averaging $499,995. Denver saw a slightly larger drop of 5.4%, with the median price at $577,350.
What caused the dip?
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The December report noted a seasonal inventory dip, with listings falling 8.6% month-over-month, marking the lowest level since June and the largest monthly drop since January 2023. This slowdown, driven by elevated mortgage rates, resulted in December 2024 being the slowest housing market since 2019. The high cost of home financing kept many buyers on the sidelines, further contributing to less competition for available homes. Despite these challenges, there’s a slight increase in overall home listings, with the total number of homes for sale (including those under contract) rising 17.5% from the previous year. However, this is a slower rate of growth compared to the 22.5% increase seen the month before.
Right now, a 30-year fixed mortgage has an interest rate of 6.87%, according to U.S. Bank. Will you be purchasing a home in the coming months? Tell us in the comments section.
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