The Phoenix housing market is cooling faster than most major U.S. cities, according to a recent report from Redfin.
Redfin examined price drops, supply, pending sales, sale-to-list ratio, speed of homes sales and more from February to August to determine which housing markets in the 100 most populous U.S. cities are slowing the fastest.
The 10 fastest cooling housing markets, according to Redfin: Seattle; Las Vegas; San Jose, California; San Diego; Sacramento; Denver; Phoenix; Oakland; North Port, Florida; and Tacoma, Washington.
The markets cooling fastest are many of the same places that saw the biggest spikes in home prices during the last three years.
Phoenix, Las Vegas, Sacramento and North Port are all on Redfin’s list of the 10 most popular migration destinations, based on net inflow. Seattle, San Jose, San Diego, Sacramento, Denver and Oakland are all among the 15 most expensive housing markets in the U.S.
“These are all places where homebuyers are feeling the sting of rising home prices, higher mortgage rates and inflation very sharply. They’re slowing down partly because so many people have been priced out and partly because last year’s record-low rates made them unsustainably hot,” said Redfin Chief Economist Daryl Fairweather. “The good news is that the slowdown is dampening competition and giving those who can still afford to buy more negotiating power.”
Rising inflation and interest rates have hurt the housing market in cities like Phoenix, which welcomed scores of remote workers during the pandemic. Many of those new residents cashed in by selling homes in pricier areas such as Seattle and San Francisco and relocating to more affordable areas with nice climates, the report said.
“The housing market has changed very quickly in buyers’ favor,” Las Vegas Redfin agent Tzahi Arbeli said. “Not only have prices fallen in recent months, but sellers see the market cooling and they’re more open to negotiating prices, giving concessions and paying closing costs. They may accept an offer that’s $20,000 below asking price and pay for repairs the buyer found during an inspection. Sellers can still get a fair price — but it’s with the understanding that they may have to wait several weeks for the right offer, and buyers are no longer willing to overpay.”