If you're thinking of buying a home or investing in an investment property, you may want to check out the West Coast for some intriguing opportunities. According to a new analysis by Redfin, the slowdown in housing has been "fastest slowing" on the West Coast, where prices in some markets have already fallen by 2 percent since July.
There are a few factors at play. Firstly, mortgage rates have been on the rise over the past few months, which has made buying a home less affordable for many people. Secondly, there's been an increase in the number of homes listed for sale, giving buyers more choices and putting downward pressure on prices. And finally, last year's tax overhaul capped the amount of state and local taxes that can be deducted from federal taxes at $10,000, making homeownership less attractive in high-tax states like California and Oregon.
*Methodology - The rankings in this report are from a Redfin analysis of the U.S. metros with housing markets that cooled down fastest from February 2022 to August 2022. The ranking is based on year-over-year changes in prices, price drops, supply, pending sales, sale-to-list ratio and the share of homes that went off market in two weeks from February to August. The analysis compares August to February because in many U.S. metros, that’s when the housing market reached a peak in terms of demand and competition while the number of homes for sale was at a low. To be included in this report, a metro must have been among the 100 most populous in the U.S. and had data available for all six variables included in the analysis.
If you're considering buying a home, now may be a good time to act. Prices have already fallen in some markets, and they could continue to fall as the slowdown continues. Of course, whether or not now is a good time for you to buy depends on your unique circumstances.
Things to consider:
These are all important factors to consider before taking the plunge into homeownership.
If you're not quite ready to buy but think you will be in the near future, it's worth keeping an eye on the housing market in your area so you can gauge when prices might start falling. In the meantime, continue saving up for your down payment and working on improving your credit score so you can get the best possible mortgage rate when you're ready to buy.
The slowdown in housing is having the biggest impact on the West Coast right now, as well as high tax states, and states with high second home / vacation home ownership, but it could spread to other parts of the country if the current market trend continues. If you're thinking of buying a home, now may be a good time to act. However, whether or not now is a good time for YOU to buy depends on your circumstances. Do your research and speak with a financial advisor before making any decisions.