New home buyers are increasingly cautious. Rising mortgage rates and falling home sales signaled the end of a hot housing market that has plagued buyers for more than a year. According to the Census Bureau, home sales are down nearly 18% since January 2022. However, some areas have cooled more than others. So which housing markets have cooled the most?
To find out where housing markets are cooling the most, SmartAsset analyzed the 100 largest metropolitan areas, 92 of which had complete data. We compared locations on a total of eight metrics, divided into two categories: lowering prices and lowering demand. For more details on our data sources and how we put all the information together to create our final rankings, read the Data and Methodology section below. But analysis showed that Metro Phoenix ranks No. 3 among the coolest housing markets.
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California metropolitan areas are cooling the most. Three California metropolitan areas rank in the top 10 in our study. Homes in these areas are staying on the market longer than they were a year ago, almost double the time. Additionally, all three areas saw a decline of more than 33% in the number of homes sold monthly from August 2021 to August 2022.
The share of listings with price cuts is up 10% from a year ago. Nationally, about 16% of real estate listings were subject to a price reduction in August 2021. By comparison, that figure is now almost 26%.
Homes have been on the market for less than 10 days in 36 metropolitan areas. Last year, 67 metropolitan areas belonged to this category. Nationally, the average time on market for a real estate listing is currently 13 days.
1. Boise, ID
Boise, Idaho’s housing market is cooling the most compared to any other metro area in our study. Boise has the sixth-lowest ratio of homes sold to new listings (0.49), which means nearly twice as many homes are listed versus sold. The median number of days a home is on the market is 20, and that number is nearly 186% higher than a year ago.
2. Austin-Round Rock-Georgetown, TX
Texas’ fourth-largest metropolitan area saw a cooling in its housing market with the fourth-largest drop in demand and the 13th-largest drop in prices. Across specific metrics, Austin-Round Rock-Georgetown has the second highest median day on market for home listings (27 days) and the fourth worst ratio of homes sold to new listings (0.49).
3. Phoenix-Mesa-Chandler, Arizona
Phoenix-Mesa-Chandler, Ariz., ranks 3rd overall. The metropolitan area has the fifth highest percentage of real estate listings with a price drop (39.61%), which is 25% more than a year ago. In addition, the number of homes sold in a month decreased by more than 41% between August 2021 and August 2022.
4. San Jose-Sunnyvale-Santa Clara, CA
San Jose-Sunnyvale-Santa Clara, Calif. ranks in the top 10 for deeper price cuts and lower demand. Homes have been on the market for about 19 days (rank eight), a 90% increase for exactly one year (rank 18). There has also been a 43.17% drop in the number of homes sold and 26.81% of active listings have a price drop.
5. Las Vegas-Henderson-Paradise, NV
Of the 92 metro areas we considered, Las Vegas-Henderson-Paradise, Nevada ranks worst for our reduced demand category. Over the past year, the number of homes sold monthly has dropped by approximately 44%. And as a result, Las Vegas-Henderson-Paradise has the third-lowest ratio of homes sold to new listings (0.48), which means almost twice as many homes are listed compared to those which are sold.
6. Salt Lake City, UT
Salt Lake City, Utah is seeing the eighth biggest drop in demand and the 16th biggest drop in price. Specifically, this area ranks in the top 10 on five metrics, including the percentage of listings with a price drop (41.89%) and the year-over-year change in the number of homes sold per month (down 41. .88%).
7. North Port-Sarasota-Bradenton, Florida
Home prices in North Port-Sarasota-Bradenton, Florida are seeing significant reductions. In August 2022, over 31% of real estate listings have a price drop and the average price drop as a percentage of home value is almost 6%. Compared to a year earlier, this is a 17% increase in the percentage of homes benefiting from a price reduction.
8. San Diego-Chula Vista-Carlsbad, CA
The San Diego-Chula Vista-Carlsbad, CA metro area ranks in the top 15 on three metrics: year-over-year change in the number of homes sold (35.53% decrease), year-over-year change the median length of time a home is on the market (twice as high) and the percentage point difference between the share of listings with a price drop over a one-year period (17.78%).
9. Provo-Orem, UT
Price reductions on homes in Provo-Orem, Utah have been widespread. The metropolitan area has the second highest share of listings with a drop in price (45.58%) and the largest increase in this figure compared to the previous year (26.26%). In terms of demand, there was a 57.38% drop in homes sold in the area from August 2021 to August 2022 and there was almost double the number of new listings compared to homes sold in August 2022.
10. Stockton, California
Rounding out the top 10, Stockton, Calif., is the eighth-longest average days-on-market for real estate listings (19 days) and the 10th-highest year-over-year change in percentage of listings with a drop of price (33.85%) . In August 2022, more than a third of real estate listings in the region are experiencing a price drop.
Methodology for Coolest Housing Markets
To find out which housing markets are cooling the most, SmartAsset compared data from the 100 largest metropolitan areas, 92 of which had complete data. We compared these domains in two categories and a total of eight measures:
- Percentage of listings with a price reduction
- Year-over-year change in percentage of listings with a price drop
- Decline in average price relative to average home value
- Year-over-year change in average price declines
Decrease in demand
- Ratio of homes sold to new listings
- Year-over-year change in number of homes sold
- Median days on market
- One-year evolution of median days on the market
Data for all metrics comes from Zillow and is for August 2021 and August 2022.
We ranked each metropolitan area in each metric and found an average ranking and score for each category. We then came up with a final score, averaging the scores from the two categories. The metropolitan area with the highest cumulative score ranked at the top of our list.