Tacoma among top cities with home price declines, Redfin says

How high can home prices go? We might have hit the tipping point.

In a sales trend update from Redfin for May, Tacoma, Boise, Sacramento and other cities were listed among those seeing home listing-price declines.

Provo and Tacoma saw the largest percentage of dropping prices, with 102 of 108 metros Redfin reviewed seeing the share of homes with a price drop increasing from a year earlier.

According to Redfin: “Nearly half (47.8%) of homes for sale in Provo, Utah (about 45 miles away from Salt Lake City), had a price drop in May, the highest share of the 108 metropolitan divisions in this analysis. Tacoma had about the same share of price cuts, at 47.7%.”

In comparison, Tacoma saw just 28.2% of listings drop in price in May 2021. The median sale price in Tacoma in May 2022 was at $575,000, up 46.8% from the same period in 2020, according to Redfin.

Provo saw just 12.2% of listings drop prices last May. Its median home price for May 2022 was $550,000, up 65.7% from May 2020.

Provo and Tacoma were followed by Denver (46.9%), Salt Lake City (45.8%) and Sacramento (44.3%). Boise, (44.2%), Ogden, Utah (42.6%), Portland, Oregon (42%), Indianapolis (41.9%) and Philadelphia (41.2%) completed the top 10, according to Redfin.

Seattle showed a 40.6% share of homes for sale dropping in price, with 24.2% dropping a year ago and its median sale price of $850,000 up 46.6% from 2020.

“Price drops are especially common in mid-sized metros in the West – particularly in Utah – many of which had outsized price growth during the pandemic because they were hotspots for people moving in from other parts of the country,” the Redfin report said, with nearly half of homes for sale in these markets seeing a price drop.

“Four of the 10 metros with the highest share of price drops – Provo, Salt Lake City, Boise and Ogden (Utah) – are among the 10 places where prices increased most during the pandemic,” it noted.

Kellie Van Essen, an agent with John L. Scott Tacoma University Place office, told The News Tribune on Wednesday that the news is “all positive.”

“What’s happening is the market is leveling out. It’s becoming a normal market,” she said.

Van Essen noted it’s happening nationwide, not just here.

“It’s a little bit shocking. The change, even looking at some of my listings from even probably March to May or June,” has been notable, she said.

Homes that sold in April and May were getting one offer, she said, compared with December-January, when, for example, a condominium she listed in Fife “got 19 offers and had 65 showings.”

Now, impatient sellers are dropping the prices in a bit of a panic “four or five days or seven days” after listing in some cases, she said.

She said it’s not only “a great time to buy, with really good interest rates,” but this is a time to educate sellers.

“The past three years … that’s not the normal market. The normal market is you get an offer within 30 days,” she said.

She’s also recommending against rapid price drops.

“There was a listing that was $800,000. Probably a week into it we got a $75,000 below list price [offer], and I recommended not to take it. And then about a month later we got an offer” above list price, she said.

Those above-list-price days seem to be waning.

Area real estate agents warned with May’s Northwest Multiple Listing Service report that a course correction was on the way, even as high prices among closing contracts continued.

According to NWMLS, Pierce County’s median closed single-family residential home sale price for May was $582,000, compared with a year ago when it was $510,000 and April’s $579,980. The county saw a 73.64% increase in total active listings for homes compared with a year ago, with 1,909 new listings for single-family residential homes in May.

“There are two kinds of sellers in today’s market: Those who already know the market has cooled, and those who are learning about the cooling market as they go through the selling process,” said Redfin chief economist Daryl Fairweather.

“As more sellers come to terms with the slowing market, fewer homes will have price drops,” Fairweather noted.

Redfin said that the share of homes with a price drop declined in six metros of the 108-city survey: McAllen, Texas; Elgin, Illinois; Chicago; Fresno, California; Lake County, Illinois; and Springfield, Massachusetts.

The chase for the next good deal never ends. Boise Redfin agent Shauna Pendleton noted in the report that those formerly seeking bargains and a “quiet, slow-paced lifestyle” in Boise were leaving after such an influx of new neighbors in a red-hot market.

“Those people are cashing in on their equity to move to more affordable areas, mainly in the Midwest, where they can get more for their money – in some cases, they can even pay all cash,” Pendleton said.

Van Essen has seen the same thing in the Puget Sound region:

“I have a co-worker, a friend and three of my sellers all moved to Texas because it’s just so expensive here.”

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