PR Newswire
- Prices rose by 8% annually for the least-expensive one-third of houses; the most-expensive homes lost value for the first time in more than a decade.
- The recent uptick in inventory hasn't included the least-expensive houses — bottom-tier inventory is up just 1% from last year, compared to a 13% boost for top-tier homes.
SEATTLE , April 20, 2023 /PRNewswire/ -- Entry-level home shoppers are dealing with faster-rising prices and more competition than those after more-expensive homes, a new Zillow® analysis finds.
"Buyers shopping for the least-expensive homes this spring aren't noticing much difference from the pandemic-era market heat," said Skylar Olsen , Zillow's chief economist. "Competition is fierce, but there aren't many homes for sale, so buyers should be patient but prepared to move quickly and anticipate a bidding war once they find a home they love."
Typical home values for the least-expensive one-third of houses rose 8% – nearly $13,000 – over the past year. Mid-level homes appreciated by 3% and the most-expensive houses depreciated by 1%, the first loss of value for the top tier since 2012.
Entry-level homes have exploded in value over the course of the pandemic across the U.S., gaining at least 60% more value since February 2020 in seven of the 50 largest markets, with Tampa , Richmond and Charlotte leading the charge.
Mortgage-interest rate hikes do more damage to monthly payments as home prices rise. This helps explain why top-tier home values are falling fastest annually in some of the most-expensive markets: San Francisco (-14%), San Jose (-11%) and Seattle (-11%).
A slight annual recovery in inventory has left out entry-level shoppers. There are just 1% more homes available for sale in the bottom price tier compared to 8% and 13% more in the slower-moving middle and top tiers, respectively.
Rate lock — the effect of relatively high mortgage rates dissuading current homeowners from selling — is contributing to a lower flow of new listings across price tiers. March saw record-low new listings for this time of year, down 22% from last year. But rate lock is having the biggest impact on entry-level buyers in expensive West Coast markets. San Jose , San Francisco , Sacramento , Portland and Seattle all have fewer than half as many new bottom-tier listings in March compared to last year.
In the recent past, entry-level shoppers had an easier time finding discounts than their well-heeled colleagues, but that comparative benefit is gone now, too. The share of mid- and top-tier homes that sold above list price rose far above the bottom-tier share through most of the pandemic. Super-low rates had cranked up demand for more-expensive houses. But after mortgage rates peaked at 7% last fall, the share sold above list price for all three tiers converged; now they're tracking together.
Metropolitan | Bottom Tier | Top Tier | Bottom Tier | Top Tier | Bottom Tier | Top Tier |
United States | 8 % | -1 % | 48 % | 33 % | 1 % | 13 % |
New York, NY | 5 % | 0 % | 34 % | 19 % | -24 % | -9 % |
Los Angeles, CA | 0 % | -6 % | 35 % | 28 % | -18 % | 2 % |
Chicago, IL | 6 % | 0 % | 40 % | 19 % | -19 % | -13 % |
Dallas, TX | 2 % | -1 % | 44 % | 40 % | 3 % | 15 % |
Houston, TX | 4 % | 2 % | 41 % | 33 % | 12 % | 28 % |
Washington, DC | 3 % | -2 % | 26 % | 22 % | -32 % | -3 % |
Philadelphia, PA | 8 % | 4 % | 43 % | 31 % | -7 % | -12 % |
Miami, FL | 16 % | 6 % | 64 % | 54 % | 18 % | 48 % |
Atlanta, GA | 6 % | 1 % | 64 % | 39 % | -1 % | 9 % |
Boston, MA | 4 % | -1 % | 34 % | 24 % | -32 % | 4 % |
Phoenix, AZ | -2 % | -3 % | 46 % | 40 % | 1 % | 55 % |
San Francisco, CA | -5 % | -14 % | 26 % | 16 % | -37 % | 2 % |
Riverside, CA | 1 % | -4 % | 48 % | 34 % | 0 % | 15 % |
Detroit, MI | 5 % | 1 % | 54 % | 27 % | 9 % | -2 % |
Seattle, WA | -3 % | -11 % | 35 % | 32 % | -32 % | 6 % |
Minneapolis, MN | 1 % | -1 % | 26 % | 23 % | -22 % | 8 % |
San Diego, CA | 1 % | -6 % | 41 % | 43 % | -38 % | -1 % |
Tampa, FL | 8 % | 2 % | 69 % | 51 % | 26 % | 59 % |
Denver, CO | -1 % | -5 % | 29 % | 25 % | -4 % | 47 % |
Baltimore, MD | 8 % | 2 % | 35 % | 25 % | -7 % | -12 % |
St. Louis, MO | 8 % | 2 % | 45 % | 27 % | 2 % | -1 % |
Orlando, FL | 8 % | 3 % | 53 % | 43 % | 12 % | 41 % |
Charlotte, NC | 7 % | 1 % | 65 % | 45 % | 30 % | 29 % |
San Antonio, TX | 5 % | 1 % | 43 % | 37 % | 42 % | 63 % |
Portland, OR | -1 % | -4 % | 30 % | 25 % | -32 % | 11 % |
Sacramento, CA | -3 % | -7 % | 32 % | 24 % | -36 % | 2 % |
Pittsburgh, PA | 0 % | 0 % | 45 % | 21 % | -6 % | 9 % |
Cincinnati, OH | 9 % | 3 % | 52 % | 32 % | -17 % | 3 % |
Austin, TX | -6 % | -8 % | 48 % | 45 % | 30 % | 95 % |
Las Vegas, NV | 0 % | -5 % | 34 % | 27 % | 9 % | 38 % |
Kansas City, MO | 7 % | 2 % | 51 % | 31 % | 5 % | 12 % |
Columbus, OH | 8 % | 3 % | 54 % | 33 % | -10 % | 16 % |
Indianapolis, IN | 6 % | 1 % | 57 % | 37 % | 8 % | 32 % |
Cleveland, OH | 6 % | 4 % | 47 % | 30 % | -1 % | 2 % |
San Jose, CA | -1 % | -11 % | 31 % | 24 % | -54 % | 16 % |
Nashville, TN | 6 % | -1 % | 55 % | 48 % | 25 % | 67 % |
Virginia Beach, VA | 8 % | 3 % | 40 % | 29 % | -16 % | -9 % |
Providence, RI | 6 % | 2 % | 42 % | 35 % | -34 % | -13 % |
Jacksonville, FL | 7 % | 2 % | 61 % | 51 % | 49 % | 63 % |
Milwaukee, WI | 8 % | 3 % | 39 % | 21 % | -32 % | -21 % |
Oklahoma City, OK | 10 % | 4 % | 56 % | 31 % | -9 % | 77 % |
Raleigh, NC | 4 % | 0 % | 54 % | 43 % | 2 % | 66 % |
Memphis, TN | 8 % | 2 % | 62 % | 35 % | 7 % | 36 % |
Richmond, VA | 21 % | -3 % | 67 % | 21 % | -12 % | -8 % |
Louisville, KY | 10 % | 2 % | 47 % | 27 % | -6 % | 2 % |
New Orleans, LA | 11 % | -1 % | 34 % | 17 % | 49 % | 48 % |
Salt Lake City, UT | -2 % | -5 % | 43 % | 36 % | 6 % | 66 % |
Hartford, CT | 9 % | 5 % | 43 % | 31 % | -32 % | -9 % |
Buffalo, NY | 4 % | 2 % | 41 % | 28 % | -1 % | -2 % |
*Table ordered by market size |
About Zillow Group
Zillow Group, Inc. (NASDAQ: Z and ZG) is reimagining real estate to make it easier to unlock life's next chapter. As the most visited real estate website in the United States , Zillow® and its affiliates offer customers an on-demand experience for selling, buying, renting, or financing with transparency and ease.
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SOURCE Zillow