San Francisco and New York are slumping as the pandemic boom fizzles out, but migration to Florida has boosted Miami.
The value of the US housing market shrunk by the most since the 2008 as the pandemic boom fizzled out.
After peaking at $47.7 trillion in June, the total value of US homes declined by $2.3 trillion, or 4.9%, in the second half of 2022, according to real estate brokerage Redfin. That’s the largest drop in percentage terms since the 2008 housing crisis, when home values slumped by 5.8% from June to December.
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Homebuyers, already facing record-high prices, took an additional hit from mortgage rates that more than doubled last year. With less competition in the market, the median US home sale price was $383,249 last month, down from a peak of $433,133 in May.
“The housing market has shed some of its value, but most homeowners will still reap big rewards from the pandemic housing boom,” said Redfin economics research lead Chen Zhao, adding that the total value of homes remains roughly $13 trillion higher than it was in February 2020.
US Housing Market Hit with Biggest Six-Month Wipeout Since 2008
The total value of US homes declined by $2.3 trillion in 2022
Note: Data includes percentage change in home value from June to December
To be sure, home prices are not collapsing. In December, the total value of US houses was still 6.5% higher than it was a year earlier.
How much homeowners lost depends on where they bought. The biggest declines were in pricey cities like San Francisco and New York, while buyers who moved to pandemic boomtowns are still seeing the returns on their investment, particularly in Florida.
That was especially true in Miami, where the total value of homes ballooned 20% year-over-year to $468.5 billion in December, the largest annual percentage increase among the top metro areas. While the overall US housing market is down, Miami’s market has about the same value as when it peaked at $472 billion in July. Meanwhile, homeowners in North Port-Sarasota, Florida, Knoxville, Tennessee, and Charleston, South Carolina, all saw annual gains above 17% in 2022.
Pandemic Boomtowns Fared Better Than Pricey Cities
Home values in the Sunbelt have held up while some big cities were hit hard
Note: Percentage change in home values year-over-year
As tech workers fled for more affordable locales, the total value of homes in San Francisco slumped by 6.7% year-over-year in December, the most of any major US metro area, followed by Oakland and San Jose, which lost 4.5% and 3.2%, respectively. Other urban areas including New York and Seattle also saw annual declines.
“Florida’s housing market is being sustained by folks moving in from the north and, as of recently, the West Coast,” said Elena Fleck, a Redfin real estate agent in Palm Beach, Florida.