Many prospective homebuyers are finding homeownership to be out of reach due to high mortgage rates, soaring home prices, and low inventory. However, in the last quarter, some Southern cities saw a drop in sale prices as buyers backed out and supply caught up with demand. The National Association of Realtors reported that 93% of metro markets had home price gains in the first quarter of 2024, with the national median sale price for single-family homes growing 5% from the previous year to $389,400. Despite this overall increase, there were declines in 15 metro markets, with nine of them located in the South.
Cities in Florida and Texas, which were previously known to be in-demand housing markets, were among those experiencing price decreases. Buyers in these regions may be getting priced out of the market as inventory has caught up to demand, leading to homes sitting on the market for longer periods, price cuts, and slowing price growth. For example, Cape Coral, Florida saw a 51% increase in homes for sale in the last quarter, along with one of the highest rates of seller price cuts and a 31-day increase in the time it takes to sell a typical home.
Business Insider compiled a list of nine Southern cities where home prices are down, based on data from the National Association of Realtors. Some of the cities included on this list were San Antonio, Texas with a year-over-year price change of -4.6%; Cape Coral, Florida with a -4.4% change; Panama City, Florida with a -3.8% change; Baton Rouge, Louisiana with a -1.1% change; Shreveport, Louisiana with a -0.9% change; Myrtle Beach, South Carolina with a -0.6% change; Austin, Texas with a -0.3% change; Crestview, Florida with a -0.2% change; and Little Rock, Arkansas with a -0.1% change.
The median home prices in these cities ranged from $202,800 in Little Rock, Arkansas to $466,700 in Austin, Texas. The necessary annual income needed with a 20% down payment also varied, with amounts ranging from $51,407 in Little Rock to $118,302 in Austin. Overall, these cities saw a decrease in home prices compared to the previous year, indicating a shift in the housing market dynamics in these regions.
The slowdown in home price growth and the decrease in prices in these Southern cities could potentially make homeownership more attainable for buyers who were previously priced out of the market. As inventory continues to catch up with demand and prices stabilize or decrease, it may provide an opportunity for more prospective homebuyers to enter the market and purchase a home. This shift in the housing market could lead to a more balanced and affordable real estate landscape in these Southern cities.
