Reply to Prices dropping in COVID Boomtowns

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[quote=Anonymous]I have been interested in whether price increases in more remote areas that boomed during covid would stick. Looks like they’re headed back down as people have to be in the office, even if just part-time.

https://finurah.com/2021/10/22/housing-market-shows-cracks-with-price-cuts-in-pandemic-boomtowns/

The slowdown is particularly pronounced in areas away from major urban hubs where buyers were seeking affordability and picturesque havens during the pandemic. That demand has ebbed as people have more reasons to stay put this fall, with the return of in-person school and more companies ordering workers back to the office, or at least requiring them to be somewhere in the vicinity.

The result: Prices are running up against the reality of local economic fundamentals.

“The markets where we’re seeing the most price cuts were flying a little too close to the sun earlier this year,” said Daryl Fairweather, chief economist for the brokerage Redfin. “Sellers got eager in their asking prices. It was not sustainable and benefited from pandemic trends that still persist, but not as extremely.”

Across the U.S., home-price appreciation slowed for a second straight month in September as part of a modest cooldown, Zillow Group Inc. reported this week. The number of homes with price cuts is growing, with counties near Denver, Salt Lake City and Indianapolis seeing more than half of listings get reductions, according to Redfin.  Even some of the hottest areas where workers from large urban cities sprawled out to, such as the counties including Portland, Maine, and Tacoma, Washington, have had cuts on more than 40% of listings, Redfin data show.

In Idaho’s Canyon County, about eight out of 10 listings have had price cuts, the biggest share in the U.S. It’s a popular area for people who can’t afford nearby Boise, a city of about 230,000 that has boomed as Californians and other escapees of high-cost regions spread out.[/quote]

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