Last quarter, some Southern cities saw sale prices drop as buyers backed out and supply finally caught up with demand, making homeownership more accessible for prospective homebuyers. According to the National Association of Realtors (NAR), 93% of metro markets had home price gains in the first quarter of 2024, with a national median sale price for single-family homes growing 5% from a year ago to $389,400. However, there were declines in 15 markets, nine of which were in the South, signaling a shift in previously in-demand housing markets like Florida and Texas.
Business Insider noted that buyers in these Southern 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, Redfin found that Cape Coral in Florida experienced a 51% increase in homes for sale last quarter and had one of the highest rates of seller price cuts, as well as a 31-day increase in the time it takes to sell a typical home. Business Insider listed nine Southern cities where home prices are down according to data from NAR.
1. San Antonio, Texas: Year-over-year price change -4.6%
2. Cape Coral, Florida: Year-over-year price change -4.4%
3. Panama City, Florida: Year-over-year price change -3.8%
4. Baton Rouge, Louisiana: Year-over-year price change -1.1%
5. Shreveport, Louisiana: Year-over-year price change -0.9%
6. Myrtle Beach, South Carolina: Year-over-year price change -0.6%
7. Austin, Texas: Year-over-year price change -0.3%
8. Crestview, Florida: Year-over-year price change -0.2%
9. Little Rock, Arkansas: Year-over-year price change -0.1%
In these cities, median home prices saw declines, making homeownership more attainable for buyers. For example, the median home price in San Antonio, Texas decreased from $320,500 in Q1 2023 to $305,800 in Q1 2024, requiring an annual income of $77,516 with a 20% down payment. Likewise, in Cape Coral, Florida, the median home price dropped from $434,000 to $415,000, necessitating an annual income of $105,197 for a 20% down payment. With prices decreasing in these Southern cities, prospective homebuyers may find more affordable options and opportunities to enter the housing market.
The shift in the housing market in these Southern cities may be attributed to a combination of factors, including rising mortgage rates, soaring home prices, and low inventory, which previously made homeownership unattainable for many buyers. However, as supply catches up with demand in some areas, homes are staying on the market longer, prompting price cuts and slowing price growth. This trend provides a window of opportunity for prospective homebuyers to consider purchasing homes in these Southern cities where prices are down, enabling them to achieve their homeownership goals more easily.
