The U.S. housing market has been on an upward trajectory for some time, but changes are on the horizon. With fluctuating home values and the evolving dynamics of remote work and economic pressures, prospective homebuyers and investors need to stay informed. We sat down with Ben Johnson, CEO of Big Ben Real Estate, and Eric Preston, founder of Agent Launch, to discuss their perspectives on key markets across the country.
San Francisco, long known for its high cost of living, is beginning to see a shift. Ben Johnson predicts a significant cooling of the city’s real estate market due to a combination of outmigration and the ongoing trend of remote work in the tech industry.
“The high cost of living, combined with the ability to work remotely, has led to a decline in demand for housing in San Francisco,” Johnson explains. “We could see home values drop by 5%-10% by the end of the year.”
As of now, the average home price in San Francisco is $1,299,639, reflecting a slight decrease of 0.3% from last year, according to Zillow. In the near future, this trend could make the city more affordable for potential buyers.
Like San Francisco, New York City is also experiencing a decline in home values, largely influenced by the pandemic-driven shift to remote work. Johnson notes that the city’s high cost of living has exacerbated the trend.
“The rental market is softening as demand for residential property decreases,” says Johnson. He predicts a potential drop of 5%-8% in home values by the end of the year.
Currently, the average home price in New York City is $742,930, a figure that may continue to decline as more residents opt for more affordable living arrangements outside the city.
The local economy, particularly the tourism industry, closely influences the housing market in Honolulu. With tourism still recovering, Johnson anticipates a drop in home prices.
Johnson predicts a cooling down in Honolulu’s housing market, with prices potentially falling by 4%-6% by year-end. The average home price in Honolulu is $794,253, but this could decrease as economic challenges persist.
Miami has seen significant growth in home prices recently, but Johnson warns that environmental factors and overvaluation could lead to a downturn.
Climate change poses a threat to Miami’s housing market through rising sea levels and increased insurance costs. “This could lead to a 3%-5% drop in home values by the end of the year.”
Currently, the average home price in Miami stands at $579,125, reflecting an 8.7% increase from last year. However, this growth may not be sustainable in the long term.
Las Vegas, heavily reliant on tourism and entertainment, is also at risk of a decline in home values. The pandemic hit the city’s housing market hard, and recovery has been slow.
“Home values in Las Vegas could drop by 4%-7% by the end of the year,” Johnson predicts. The average home price is currently $422,880, but this figure may decrease as the local economy continues to stabilise.
Chicago’s housing market is facing several challenges, including high property taxes, crime rates, and a lack of population growth. These factors are contributing to a decline in home values.
“Chicago’s housing market may see a decline of 2%-4% by the end of the year,” says Johnson. The current average cost of a home in Chicago is $298,397, but this could drop as the city grapples with fiscal challenges.
The rise of remote work and high living costs are impacting Seattle’s housing market, similar to those in San Francisco and New York. Johnson expects home values to decrease in the coming months.
“Home values in Seattle could drop by 3%-5% as more people choose to live outside the city,” Johnson predicts. The average home price in Seattle is currently $884,828.
Austin, Texas, has seen rapid growth in recent years, but the market is starting to cool. Eric Preston, CEO of Agent Launch, attributes this to an increase in inventory and new construction projects.
“The market is evening out between buyers and sellers, and housing prices are cooling off,” says Preston. “We could see the median home price drop to $550,000 or lower by the end of the year.”
In May 2024, Austin’s median listing price was $650,000, with a recent median sale price of $567,000. This trend suggests that the market is stabilising after a period of intense growth.
Home prices in St. Louis have dropped 2.2% since last year, and this trend is likely to continue. Preston identifies rising taxes in some municipalities as a key factor driving an affordability crisis.
“Home prices in St. Louis could drop to $200,000 by the end of the year,” Preston predicts. The city’s median home price is currently $221,000.
Experts predict a 10.2% decline in home values in Washington, D.C. in 2024, making it one of the largest declines.Preston attributes this to a lack of buyers and economic challenges.
“The median home price in Washington is $602,000, but it could drop another 3%-5% by year-end,” Preston says. The city’s housing market is under significant pressure as mortgage rates and economic problems take their toll.
The U.S. housing market is in flux, with several key cities expected to see declines in home values by the end of the year. For potential buyers and investors, understanding these trends is crucial for making informed decisions. While some markets may offer opportunities for more affordable purchases, others may continue to face challenges that could impact long-term value.
As you strategise your next step, take into account the insights provided by Ben Johnson and Eric Preston, and closely monitor the changing dynamics of the housing market.