Despite the sweltering heat, real estate’s red-hot tear is, at long last, slowing down and chilling out.
In our series “How’s the Housing Market This Week?” we look at the four crucial indicators: home prices, new listings, days on the market, and mortgage rates. For the week ending July 23 (the most recent research available), all four are showing noteworthy shifts that suggest that the raging seller’s market of the past two years might be balancing out.
This is potentially good news for homebuyers but not so much for sellers, who are on edge and worried they’ve missed the peak to cash in. Given things are changing fast, here’s the information you need right now to navigate today’s treacherous market prepared.
1. Asking prices are still up, but getting cut left and right
The latest June data from Realtor.com® places the median home price nationwide at a record-setting $450,000. And, for the week ending July 23, the median listing price continued its 32nd straight week of double-digit growth, shooting up by 16.6% over last year.
However, these sky-high asking prices are just that: an ask. And buyers just aren’t biting like they used to. As a result, the portion of home sellers who resorted to cutting their price in June doubled to 14.9% from 7.6% last year.
“Although home prices have not retreated, homeowners seem to be aware of the shifting market dynamic,” Realtor.com Chief Economist Danielle Hale points out in her analysis. “And it may already be affecting their willingness to sell.” (More on that next.)
2. Fewer homes are going up for sale
The number of new listings on the market dropped by 6% year over year for the week ending July 23—that’s the third straight week of decline.
This means homebuyers have fewer properties to check out, although inventory overall (including new listings as well as oldies still up for grabs) is up by 30% over a year ago.
“The improvement for buyers essentially means they have four choices today for every three they had one year ago,” Hale explains.
Nonetheless, to put this in a larger context, active listings for the entire month of June remain less than half their level a year earlier.
“Today’s shoppers have more options,” Hale says. “But the market needs even more before the selection is on par with the pre-pandemic or even the early-pandemic housing market.”
3. The pace of home sales has hit a turning point
For the week ending July 23, homes lingered on the market for the same amount of time as last year. While the latest monthly figures show homes getting snapped up within 32 days, this breakneck pace seems to be finally bottoming out.
“For the first time in two years, weekly data show that homes aren’t selling faster than in the prior year,” Hale explains. “They’re not yet taking longer to sell, but if recent trends continue, an increase in the time a home sits for sale is on the horizon. That should eventually help alleviate buyers’ sense that they need to rush to make an offer.”
4. Mortgage rates dipped
According to Freddie Mac, for the week ending July 28, the average 30-year fixed mortgage rate dropped to 5.3%—down from the previous week’s average of 5.54%.
Yet whether this momentary reprieve for homebuyers will last is anyone’s guess. Adding to the turmoil, the Federal Reserve approved yet another interest rate hike on Wednesday of three-quarters of a percentage point—the fourth increase in five months—in its ongoing fight to curb inflation by dampening Americans’ desire to spend (or borrow, as most do for housing).
And so far at least, the Fed’s efforts appear to be having the desired effect on homebuyers, many of whom are thinking twice about whether to forge ahead.
“As inflation continues to exceed expectations, data show that the Fed’s policy adjustment is cooling housing demand,” Hale says. Plus, “the forward-looking pending home sales data suggests further cooling on the horizon.”
We’ve seen plenty of homes get price cuts. It’s a way to coax buyers off the sideline. In most cases, those price reductions are in the range of, say, 5% to 10%.
However, this week’s most popular home on Realtor.com® took a completely different tack. It paid off with tens of thousands of clicks—and an offer.
This drastic reduction even caused us to do a double take.
A nondescript five-bedroom home in Central Florida home was originally listed on May 12 for $750,000. Two weeks later, it was reduced to $699,000. On June 15, it went down to $650,000. Exactly one month later, the agent pushed all the chips in and slashed the price to $300,000.
As far as we can tell, nothing about the home changed. It wasn’t wrecked by a storm or burned to the ground. It simply wasn’t selling. To reduce the price by more than 50% is a bold sales strategy.
Perhaps it’s a sign of the times or just a marketing tactic designed to spur a bidding war? Whatever the reason, it created plenty of buzz for a home that wasn’t attracting any interest.
In addition to pricing shenanigans in Florida, you also clicked on a midcentury modern home with an indoor pool in Pennsylvania, a riverfront antique in Maine, and a beautiful Craftsman home in Illinois.
For a full look at this week’s 10 most popular homes, scroll on down.
Why it’s here: From the custom wallpaper to the funky furniture, the quirky interior of this brick home isn’t for everyone.
The listing states the home “has been completely remodeled,” but a buyer must be prepared to love wallpaper—or know how to remove it. Built in 1932, this six-bedroom residence features original hardwood floors, built-ins, custom cabinetry, and an indoor adobe fireplace.
Why it’s here: This affordable and gorgeous midcentury modern home comes complete with its own indoor swimming pool.
Built in 1951, the three-bedroom house features plenty of windows to bring natural light. Standout features in the open concept home include a sitting area with a fireplace, a kitchen with peninsula seating, and a bilevel patio with a built-in fireplace.
Why it’s here: The price of this three-bedroom charmer reflects the TLC needed to restore the historic beauty.
The New England Cape’s history can still be seen in the wide-plank wood floors, built-ins, and fireplaces (five of them!). And if you’re looking for privacy, this 1,660-square-foot home sits on 17.5 acres on the Sheepscot River.
Why it’s here: It’s an authentic Spanish Mediterranean-style home in the Lone Star State.
From the arched doorways and beautiful tile to the ornamental ironwork and suspended circular staircase, this four-bedroom home has serious Spanish style. A second-floor balcony off the primary suite overlooks the pool and pool house.
Why it’s here: While the price of $16 per square foot is certainly attractive, the septic system on this four-bedroom home does not work. And buyer beware: The approved plans for a new install call for a strict low-flow tank.
Built in 1828, the 3,180-square-foot property is located near a busy highway and might be best suited for commercial use. The back porch may also need to be removed to accommodate the new septic system. No surprise: It’s being sold as is.
Why it’s here: This affordable six-bedroom Craftsman has been meticulously preserved over the years.
Built in 1920, the spacious residence features original oak woodwork, coffered ceilings, and dual staircases. Inspired by the Arts and Crafts movement of the early 1900s, the brick home also features curved walls and arched windows.
Why it’s here: This enormous five-bedroom antique comes with a cozy guest cottage and a pond.
Sitting on just over 3 acres, the home features two fireplaces, built-ins for storage, and other period details. Some minor fixes will be needed, but the kitchen was recently updated and now offers quartz countertops and a double wall oven.
Why it’s here: It’s a custom-built, California-style contemporary resembling a stylish fortress—in Scranton.
Built in 1995, the four-bedroom home features nearly 6,000 square feet of living space. From the interior glass walls to the walls of windows overlooking the yard, it was designed to bring in lots of natural light. The first floor features a primary suite and additional bedroom, while a spiral staircase leads to a loft area and two more bedrooms.
Why it’s here: It’s 60% off its initial list price of $750,000! And nothing seems to be wrong with the home!
The listing notes that the massive price reduction was a shift in “market pricing strategy.” It worked, because the home is now pending sale. We’ll see if the huge price cut led to a multiple-offer situation. In any case, the sellers are willing to take a bath on a place they bought in 2019 for $460,887.
As for the five-bedroom home, it is tucked inside a gated community and features modern amenities. Built in 2018, the house has 3,555 square feet of living space. There’s a gorgeous primary suite with a soaking tub, a kitchen with a butler’s pantry, and a lower level that could be transformed into an in-law suite.
Forget, for a moment, what you’ve heard about a housing correction. Home sellers continued to rake it in at the fastest pace in more than a decade in the second quarter of the year. Record-high home prices helped them to sell their properties for about 55.5% more than what they originally paid for them, according to a recent report from real estate data provider ATTOM.
That translated into the average home seller earning a $123,869 profit on the sale of their condos and single-family abodes over a short time span. Sellers in the second quarter spent only an average of 5.87 years in their homes before putting them on the market, according to the report.
“Home sellers in the second quarter continued to benefit from the rapid growth in home price appreciation the country has experienced over the past few years,” Rick Sharga, ATTOM’s executive vice president of market intelligence, said in a statement. “While price growth may slow down as higher mortgage rates dampen demand from prospective homebuyers, home sellers should continue to profit.”
In addition, all-cash purchases made up just over a third, 35.4%, of sales in the second quarter. That’s the highest percentage in eight years.
Sellers in Florida experienced the biggest increase in their paydays over the past year as Americans flocked to the Sunshine State during the COVID-19 pandemic. In the Fort Meyers, FL, metropolitan area, sellers received on average about 90.9% more than what they paid for their homes—compared with 47.1% a year earlier. The city, on the Gulf Coast of the state opposite from Palm Beach, FL, is a popular retirement and vacation destination.
(Metros include the main city and surrounding towns, suburbs, and smaller urban areas. Only metros with at least 200,000 residents and a minimum of 1,000 sales of single-family homes and condos in the second quarter were included.)
“Florida has seen a huge influx of out-of-state purchases from both traditional homebuyers fleeing from high-priced, high-tax states like New York and from investors looking for affordable fix-and-flip and rental properties,” Sharga tells Realtor.com®. “This influx was fueled in part by employees now having the opportunity to work from home, and opting for a more affordable location which also offered a high quality of life. Florida home prices were a relative bargain compared to states like New York, New Jersey, and California.”
The rest of the metros with the highest year-over-year jump in profits were Naples, FL, where sellers made profits of 83.1% compared with 40.4%; Ocala, FL, at 85.2% compared with 44.4%; Gulfport, MS, at 30.8% compared with 6.5%; and Yuma, AZ, at 77.8% compared with 42.7%.
Meanwhile, profits fell annually in only 20, 11%, of the 183 metros that ATTOM analyzed.
Seller profits in Salem, OR, about 50 minutes southwest of Portland, dropped the most, from 87.5% in the second quarter of last year to 55% in the second quarter of this year. It was followed by Hilo, HI, from 140.8% to 110.5%; Boise, ID, from 122.8% to 100.1%; Salisbury, MD, from 57.1% to 48.6%; and Albany, NY, from 35.4% to 28.3%.
It’s hard to scroll through social media or flip a channel without encountering a real estate influencer who is ready to either sell your home or make it more fabulous. And chances are, you are eager to hear what they have to say. After all, they are famous.
The rise of the ubiquitous real estate pro-celebrity makes sense. There are addictive reality TV shows like “Selling Sunset,” where you’ll binge on Grant Cardone‘s advice—along with his 4 million-plus, highly engaged followers on Instagram. Or maybe you tune in for makeover programming like HGTV’s “Property Brothers.”
There are many TV shows battling for attention in the home improvement/selling space, and major stars have emerged from the most popular ones. Most are eager to expand their digital footprint with spinoff shows, Instagram feeds, and YouTube tutorials.
So is real estate “influencing” here to stay? We asked housing experts for their hot takes.
The HGTV factor
Real estate agents have always played outsize roles in their cities and towns.
“When I was a child, my dad was well-known in our community after 30 years in the real estate market,” says Charles Catania, principal at Branding With Chuck, which provides executive branding services to real estate agents. “Realtors® are the purveyor of our housing hopes and dreams.”
But it was the advent of HGTV that allowed real estate pros to move from a local to a national stage.
The channel was launched more than 25 years ago, when the only home-improvement-focused national TV show was PBS’ informative (but relatively staid) “This Old House.” But HGTV shows didn’t begin gaining mass popularity until the early aftermath of the housing crash, according to the New York Times. Back then, everyone wanted to get in the housing game—and needed advice on how to buy, sell, and renovate their homes.
Since then, HGTV has not only redefined what we want from a home but also what we expect an agent to be.
“Reality shows on HGTV and Bravo made real estate agents much more influential,” says Rudy Boyd, an associate broker at Dwelling Michigan. “These days, there are numerous real estate agents with top Instagram feeds, who sometimes land or are featured on TV shows.”
The pandemic sped up the obsession
Many homeowners focused on home improvement projects when everyone was home 24/7 during the COVID-19 pandemic. (While the U.S. economy shrank 3.5% in 2020, spending on home improvements grew 3%, to $420 billion.) The focus on everything home just cemented the obsession with real estate influencers.
“The pandemic definitely increased the visibility of real estate professionals,” says Marie Bromberg, a licensed real estate salesperson with New York City’s Compass. “Now, a home is never ‘done’ for many people. So there’s always motivation to change the entryway or the kitchen.”
The changing perception of what agents do
Now, real estate agents are no longer just people we turn to when we need a house.
“Their influence goes well beyond that, and we look to them for advice that covers the entire field of homes and real estate,” Boyd says.
The increased prominence of the real estate agent in social media and TV has drawn many people to try their hand at what they think will be a fun and highly lucrative gig.
The simmering desire to pivot to real estate came to a boiling point during the pandemic when many people reexamined their lives and careers. As a result, in 2020 and 2021, more than 156,000 people became real estate agents, a rise of 60% over the two previous years.
Some of the newcomers find a big disconnect between the business as seen on TV and as it exists in real life.
“Real estate has always been tough, but when people go into it after seeing a real estate agent on TV land a huge commission on a multimillion-dollar sale, it skews the perception of the job,” says Christina DeSimone, a licensed real estate salesperson for the Miranda Real Estate Group in Saratoga Springs, NY.
As a result, some agents dislike the phenomenon of influencers, because it makes real estate look like a get-rich-quick scheme instead of a long-term wealth-building tool.
“But I don’t blame agents for using influencing to boost their careers,” says Marina Vaamond, owner and founder of HouseCashin in Houston. “This is a societywide phenomenon.”
Most real estate agents take social media seriously—even those who recognize the flaws in how reality TV stars have portrayed the industry.
“I started posting my listings and videos of me sharing homebuying, decoration, and renovation tips on social media several years ago when a mentor gave me great advice,” says DeSimone. “He told me: ‘Don’t be a secret agent.’ What he meant is that you want people to know what you do—and to think of you when it’s time to buy or sell a house.”
Inflation has become public enemy No. 1, and the U.S. Federal Reserve has put a big, broad target on its back.
The Fed is desperately attempting to battle fast-rising prices on everything by raising its short-term interest rates yet again on Wednesday—this time by 0.75 basis points, or three-quarters of a percentage point. But what impact will these continued salvos have on America’s already stressed housing market? And how closely are housing and inflation tied together, anyway?
Inflation, it has become exceedingly clear, is one of those things that everyone knows, most people fear, but few people truly understand. Even fewer are aware of the outsize role that the housing market plays in driving it up. And how, in order to tame it, the Fed will first have to get the runaway prices in the housing market under control—even if it means making things a whole lot worse before they get better.
Confused? You’re not alone. But here’s a simple fact: The Fed’s attempts to wrangle inflation are expected to make the cost of buying or renting a homemore expensive for now. That’s expected to push the inflation the Fed is fighting even higher.
“Is it the chicken or the egg? The rising rates are causing housing prices to rise,” says Kelly Mangold, principal of RCLCO Real Estate Consulting. “The Fed is seeing that rise, and the Fed is raising its rates more to temper this.”
Inflation makes it difficult for consumers and businesses to accurately budget for the future. It also discourages saving as money is worth less in the future. Many folks won’t want to wait on buying something if the cost is expected to increase if they wait.
The Fed’s goal in raising its rates is to make it cost more for consumers and businesses to borrow money, such as putting a purchase on a credit card, so that demand falls. That should help stabilize prices.
But it’s a delicate dance as every increase pushes the nation’s economy even closer to another recession. And while the Fed can influence demand, it can’t control the supply chain problems and the war in Ukraine, which have made many coveted items more scarce.
So what exactly is inflation? And what sort of role does housing play in it?
How does the Fed measure inflation?
The Fed measures inflation mainly through the Consumer Price Index. The U.S. Bureau of Labor Statistics measures the prices over time of about 200 categories of goods and services like food, energy, cars, apparel, medical care, and housing.
Last month, inflation spiked 9.1% compared with a year earlier. A healthy annual inflation rate is only about 2%.
The Fed also looks at the Producer Price Index, which looks at the inflation experienced by producers and businesses. The prices of construction materials such lumber, drywall, and windows are included in this index.
Housing, which includes rents and the estimated costs of homeownership, makes up about a third of the goods and services that are measured for inflation. It rises to over 40% if furniture and utility bills are factored in. So when people spend more to renew their leases or the prices of homes for sale spike, it shows up in the inflation data that the Fed monitors closely.
“Housing leads the economy,” says Robert Dietz, chief economist of the National Association of Home Builders. “Housing is often the first sector to experience weakness during a recession, but it’s often the first sector to rebound as well.”
Why the Fed is making the housing market even more expensive as it attempts to cool it down
Ironically, the more the Fed raises its rates, the more expensive housing becomes. That heightens inflation even further. Since the Fed’s main tool to fight fast-rising prices is to raise its rates, it can become a bit of a spiral.
When the Fed raises its short-term rates, mortgage interest rates generally follow a similar trajectory. They tend to bump up each time the Fed announces another rate hike. As mortgage rates go up, it becomes more expensive to borrow money to buy a home. That prices many would-be buyers out of the market.
The Fed is betting this will temper the out-of-control price growth seen since the COVID-19 pandemic began. In one sense, it’s already working: The housing market has slowed down, sellers are slashing prices, and bidding wars are dissipating.
However, everyone still needs a roof over their heads. So many folks who can’t afford a home of their own are renting instead. And when there’s more demand for rentals, prices rise.
Since housing plays a pivotal role in the budgets of most Americans, when those prices rise, so does inflation.
Complicating matters is that rents typically rise only when tenants renew their leases, once a year or every two years. With inflation soaring, that means higher rent increases likely won’t show up in the inflation report for another quarter or two.
“For the Fed, that’s tough,” says Dietz. “Housing is going to be a lagging contributor to inflation in the future.”
The biggest driver of high housing costs is that there aren’t enough homes to go around for both buyers and renters—not even close. When there’s more demand than supply, prices go up. That’s not something the Fed can fix.
“They’ve got a tough challenge,” says Dietz. “We know if we truly want to tame inflation within the housing sector, that means additional homes [are needed] for people to rent and buy. The Federal Reserve can’t do that.”
Will the Fed continue to raise rates?
The big question is whether the Fed will continue to raise rates—increasing the likelihood of another recession.
“My guess is they’ll have to raise rates one or two more times,” says economics professor Lawrence J. White, of New York University.
Critics have accused the Fed of allowing inflation to get out of hand before taking steps to get it under control.
“They were too lenient for too long,” says White. “They took too long to realize that inflation was a problem. They don’t want to be caught on the other side, prematurely easing up and causing inflation to rekindle.”
In another twist, if the Fed fails in delivering a “soft landing” for the economy and it slips into a downturn, then it will likely start slashing rates once again.
“They’ll raise them until we get to the intended impact of tempering inflation,” says RCLCO’s Mangold. “But then they’ll probably level them off or begin cutting them depending on how the economy is responding.”
The Fed is also to blame for inflation
Supply chain snafus and shortages, the war in Ukraine, and stimulus payments that Americans received during the pandemic have been cast as the Big Bads when it comes to inflation. But some economic experts are blaming the Fed as well.
The Fed increased the amount of money in circulation during the pandemic as it purchased bonds. Interest rates dropped. This helped lead to rock-bottom mortgage rates, which then spurred a rush on the housing market and led to sky-high home prices as demand for homes soared. This pushed up rents when would-be homebuyers were priced out of the market and needed places to live.
“Prices go up when we have more money in circulation,” says economics professor Antonio Saravia, of Mercer University in Macon, GA. “If we have all of this money floating around in the economy, what do people do? They go shopping, chasing the same number of goods and services with more cash. As a result, prices go up—and that’s how you get inflation.”
The Fed raising interest rates and selling more U.S. Treasury bonds is expected to reduce inflation. If it costs more to borrow money or put something on a credit card, consumers and businesses are likely to spend less.
“Now that the loans are more expensive, people are going to buy fewer houses,” says Saravia.
Heather Rae, who’s already a stepmom to Tarek’s two children with Christina Hall, is over the moon at the prospect of welcoming a new baby—and she’s crowdsourcing her Instagram fans for some help with the nursery’s decor.
According to a recent post, she’s “going for a neutral vibe” and loves gray and taupe shades. She’s also into animals, particularly elephants, which means a safari-themed baby room is quite possible.
Heather Rae is also partial to blond wood, plush textures like sheepskin, greenery, dramatic overhead lighting, and framed animal faces. It’s certainly far more sophisticated than bathing a room in pink or blue pastels, and it’s a look that designers applaud.
“A neutral scheme grows with your baby, which means it’s less work to update the room based on their interests or current trends,” says Elise Armitage, design blogger at What the Fab.
But don’t forget to include some color, Armitage adds, such as “dark blue or green, which add pops without making it feel frilly or childish.”
Heather Rae’s penchant for neutrals, which she describes as “very calming colors” for the nursery, is evident in the house she and Tarek decorated in Newport Beach, CA.
The goal here is probably a subtle yet chic baby room to blend seamlessly into the El Moussa home—and we’re here to help you envision it along with the happy couple. Check out these top suggestions for the newest member of the El Moussa family (or for your own nursery).
Heather Rae’s Instagram story features rooms with adorable photos similar to these hung over the crib and dresser. This black and white nursery art ($28-plus, Etsy) fits the neutral theme she hopes to achieve, and the price for six is reasonable.
A new mother has no time to water and prune an actual tree. But a fake number is ideal for a pop of green in a quiet baby room. Heather Rae’s inspiration board showed glimpses of trees in two of the pictures, and this choice more than fits the bill.
Complete with a planter, fake moss, and the tree ($158, Wayfair), it can be assembled quickly and slid into place.
“A fake tree adds both color and height in a corner. Try faux olive or fiddleleaf figs, too,” suggests Armitage.
Soft floor covering is key for newbie crawlers and tired parents alike. Placing this piece atop a carpet with a shorter nap or opting for sheepskin-stuffed animals are two worthy ways to add texture to nursery decor.
This soft shag ($15-plus, Amazon) features a nonslip design so there’s no need to buy an extra layer to put beneath it.
Armitage notes you can also add texture with a “soft throw on the back of a chair or with woven storage baskets for things like diapers and toys.”
“Skip the changing table and go for a big dresser with a changing pad on top,” Armitage says.
The reason? You’re not stuck with a piece you won’t need again (except with another child), and a bureau can be used for a lifetime.
“This particular item ($350, Ikea) comes in a few different colors, and you can switch out the knobs to match your design,” Armitage adds. We bet Heather Rae chooses lions!
Since clutter in the El Moussas’ nursery just won’t do, this cute pachyderm hamper ($100, Home Depot), which also comes in white, can smartly corral baby laundry or a toy collection.
Why save large lighting for the main areas in a house? A nursery is an ideal spot for this glowing wonder as it could also double as a mobile. This adjustable-height fixture can be installed in most bedrooms, comes with a dimmer option for dark-of-night feedings, and can be ordered with either a brass, chrome, or black finish ($307, Wayfair).
A three-in-one crib, daybed, and toddler twin is a savvy choice for homeowners trying to stretch their budget. We also love the slender spindles and clean lines, plus the fact that it comes in three wood tones, including black and natural and natural and white ($499, Crate & Kids).
Say what you will about the futility of playing the lottery, but I’d wager there isn’t a person out there who doesn’t start dreaming about the life they’d lead—the mansion they’d buy—when they hear that the Mega Millions jackpot is up to $810 million.
That’s the third largest windfall in history! (The lucky winner is selected on Tuesday night.)
Even the most skeptical and prudent among us, like my husband, find themselves fantasizing. When he catches me buying lottery tickets, first he shakes his head and reminds me that my chances are about 1 in 303 million.
Then he sits down with me and starts scrolling through opulent beach houses in Malibu, penthouses in Manhattan, and other luxurious pads that could be ours just in case we beat those odds and won.
Admit it. You’ve fallen down that rabbit hole yourself, haven’t you?
Granted, if you take the Mega Millions cash payout (rather than electing to receive hefty payments on an annual basis), you’ll receive an estimated $470.1 million. After taxes, that’s approximately $352.5 million, depending on the state you live in.
That might seem like a pittance compared with the original total, but look at it this way: It still leaves you with the ability to purchase one of these $100 million-plus mansions below, as well as all the landscapers, butlers, and other staff you’d need to keep it in top shape.
Go ahead and take a look. Mega Millions tickets cost $2 apiece, but dreaming is free!
Price: $125,000,000 High-tech titan: Rub shoulders with the Silicon Valley greats in Green Gables, described as “one of America’s grandest estates.” There’s plenty of room for family, friends, and the myriad hangers-on who will doubtless start attaching themselves to you, because it has an impressive 34 bedrooms and 26 baths in 23,900 square feet of living space.
It also sits on 75.04 acres in prestigious Woodside, where business billionaires like Steve Jobs, Charles R. Schwab, and Larry Ellison have all called home.
Price: $100,000,000 High roller: Casino magnate Steve Wynn bought this fancy Beverly Hills mansion from Guess co-founder Maurice Marciano, then fixed it up to rival his most lavish resorts and listed it for sale much improved.
He added 8,000 square feet of living space to the estate, which now measures 27,150 square feet and boasts 11 bedrooms and 14.5 bathrooms. It sits on a 2.69-acre hilltop and features dramatic views of all of L.A.
Watch: Nevada’s Most Expensive Home: Lake Tahoe’s $64M ‘Castle on the Hill’
Price: $135,000,000 I’ll take Manhattan: $135 million won’t get you much square footage here, comparatively speaking, but it will buy you a home in the clouds on one of the world’s most prestigious addresses on Central Park, approximately 1,396 feet above the masses.
This minimalist, Hiroshi Sugimoto–designed penthouse known as the Floating Inner Garden encompasses an entire floor measuring 8,055 square feet, with five bedrooms and seven baths, plus two adjacent apartments. It has unobstructed helicopter views in all directions, soaring ceilings, and not one, but two private elevators.
Price: $100,000,000 Mega in Miami: This Golden Beach compound features 250 linear feet of ocean frontage on 1.5 acres in one of Miami’s chicest enclaves.
Even though it features five bedrooms facing the ocean, 16 bathrooms, plus a 58-foot -longswimming pool and a grand veranda, it’s a bit of a fixer-upper. After all, this is the first time the property has been on the market in 40 years, so it’s just waiting for some lucky lottery winner to scoop it up and add a contemporary vibe to the neighborhood.
Price: $100,000,000 Rocky Mountain high: One of only five single-family homes on Aspen Mountain, this iconic residence with ski-in, ski-out access features 10 bedrooms and 12 baths in 14,154 square feet of living space.
It’s private, nestled in a grove of Aspen trees, and it has a modern, ultraluxe interior that goes far beyond log cabin. This is definitely one of a kind.
With the cost of everything from gas at the pump to a box of cereal surging, Americans are desperately looking for a break. And with rising mortgage interest rates now making it even more expensive to purchase a home, many buyers are looking for real estate deals further off the beaten path.
Many of the up-and-coming housing markets of the summer were smaller cities far from the coasts that boasted more affordable home prices, according to the Wall Street Journal/Realtor.com® Emerging Housing Markets Index. Seven of the top 10 had median list prices that were below the national median of $450,000 in June.
The top emerging housing market was Elkhart, IN, which is no stranger to this list. Prices in the small, Midwestern metropolitan area, about 30 minutes east of the University of Notre Dame and South Bend, IN, and roughly two hours from Chicago, have soared. They rose 17.2%, to a median $279,450 in June, from the same time a year ago, according to the most recent median list prices from Realtor.com.
“With home prices at record highs and interest rates pushing the mortgage payment of a typical house 60% higher than last year, buyers are attracted to markets which offer more for their money,” says George Ratiu, manager of economic research for Realtor.com.
The index identified the top markets for both buyers and investors out of the 300 largest metropolitan areas. The quarterly index looks at metropolitan areas with strong housing demand and rising prices combined with robust economies, lots of well-paying jobs, a good quality of life, and desirable amenities such as lots of small businesses and reasonable commutes to work. (Metros include the main city and surrounding suburbs, smaller towns, and urban areas.)
“In addition, today’s top emerging markets offer the benefits of a strong local economy,” says Ratiu. “The top 10 metros tend to be home to a good mix of private industries, health care, higher education, along with government agencies and institutions. With low unemployment rates, these locales also offer slightly higher wages.”
Elkhart is a recreational vehicle manufacturing powerhouse with an unemployment rate of just 1.8% in May—about half of the national average. Most of the area’s buyers are from nearby South Bend as well as Chicago. About 44% of the area’s buyers are from outside of Indiana, according to Realtor.com.
The area is particularly appealing because it’s so affordable. Those buying a home in the Elkhart metro area are looking at a roughly $1,275 monthly mortgage payment for a median-priced home, according to Realtor.com data. That’s significantly lower than the national median of $2,100 a month.
“Our market this last year has been extremely strong. Inventory’s been low, and demand’s been extremely high,” says local real estate agent Toni Bontrager, of Berkshire Hathaway HomeServices. However, that’s beginning to wind down. Two local RV manufacturing plants are shutting down this fall, and the national economy has become a bit shakier.
“Everything’s slowing down right now,” says Bontrager. “It’s been a seller’s market. I think we’re slowly transitioning into a buyer’s market.”
Homes priced below $200,000 are still going fast—often with multiple offers, says Bontrager. But most homes priced above that are now taking longer to go under contract as bidding wars are no longer as common for them.
Despite the shift in the local real estate market, Elkhart is likely to remain popular with buyers, particularly those looking for deals.
“People make good money here,” says Bontrager. “Homes here that are $400,000 or $500,000 would be over $1 million in California. … We have lakes and rivers, and it’s an absolutely a beautiful place to call home.”
Top 10 emerging real estate markets of summer 2022
Just a few months ago, home sellers were living the high life. Once they decided to list their homes, everything was smooth sailing all the way. They didn’t have to bother with fixing much of anything or staging rooms to look bigger or better. Heck, many didn’t even trouble themselves to clean their homes before opening them up to eager buyers. And yet many sellers were still receiving multiple offers well over the asking price from buyers, who were often waiving home inspections and every other conceivable contingency to nail down a deal.
Sellers who watched as their neighbors’ homes—ones with kitchens and bathrooms that hadn’t been updated in decades—sold for record prices to all-cash buyers within days in the spring have been dumbfounded by the abrupt shift in the market. While some sellers across the nation are continuing to receive lucrative offers, others have been lucky to get an offer at or below their list price. That’s led those not quite so fortunate to slash their asking prices in hopes of attracting buyers.
So widespread price cuts have moved from rarities to standard operating procedure in some of the nation’s hottest real estate markets. But where are they happening the most? Realtor.com® set out to find the cities where the percentage of price reductions are the highest. These are the metros where sellers are pricing their properties the most out of step with what buyers are willing to pay for them—and where buyers might be able to negotiate a better deal.
“With buyers pulling back, homes linger for a longer time on the market and more homeowners have to slash prices to get a deal done,” says Realtor.com Senior Economist George Ratiu.
The parts of the country seeing the steepest price cuts tend to be those that attracted lots of interest from out-of-state buyers and prices surged the most, far out of reach of many local would-be buyers.
Eight of the top 10 metropolitan areas with the most price reductions—except for Sacramento, CA (No. 7), and Colorado Springs, CO (No. 8)—experienced higher appreciation during the COVID-19 pandemic through today (March 2020–June 2022) than the national 26.2% rise over the same period.
“Price cuts are hitting hardest in markets which have been on a hot streak during the pandemic—cities which saw an influx of buyers looking for quality of life, more space, and affordability,” says Ratiu. “These are also markets which experienced a fast ramp-up in prices due to the inadequate supply of housing.”
To find the places with the most price reductions, the Realtor.com data team analyzed the 200 largest metropolitan areas and calculated which ones in June saw the highest percentage of home listings with price cuts on Realtor.com. To achieve geographic diversity, we included only one metro per state. (Metros include the main city and surrounding towns, suburbs, and smaller urban areas.)
More metros are expected to make their way onto this list as the year goes on,
“As the number of homes for sale grows, we can expect price reductions to become the norm, especially in high-cost areas,” says Ratiu. “For buyers, the change points to more opportunities in the months ahead, especially the fall and winter.”
Now, let’s take a look at some places where buyers just might be able to find a bargain. Maybe.
Metros experiencing the highest percentage of price cuts in June:
Median home list price: $562,500 Percentage of listings with price reductions: 23.2%
Sellers in some of the hottest pandemic markets are slashing prices
Austin, TX (No. 2), Phoenix (No. 3), and Boise, ID (No. 5), became the poster real estate markets for the wild surge in home prices during the pandemic.
Austin, the funky state capital of Texas, attracted a flood of new residents drawn to the trendy city’s lower prices and taxes—compared with many cities on the coasts—as well as a plethora of new jobs in the region. For example, Tesla relocated its headquarters to the area in late 2021.
Meanwhile, droves of Californians and other refugees from pricey West Coast cities streamed into Boise, an artsy, burgeoning tech hub. Phoenix has proven hugely popular with families and baby boomers nearing retirement.
Many retirees and high-earning professionals who could suddenly work from anywhere relocated to these red-hot areas. Plenty of these newcomers sold their homes in their pricier cities to buy property in Austin, Phoenix, and Boise, which inflated prices beyond the means of many locals.
In Austin, prices shot up more than 66% from March 2020, when the COVID-19 shutdowns began, through June of this year. They increased about 35% in Phoenix and 53% in Boise over the same time span.
However, this spring the number of homes for sale more than doubled in each of these metros as sellers raced to get their homes on the market—before it was too late.
“Sellers are worried. They missed the peak of the market,” says Phoenix real estate agent Kristy Ryan, of Re/Max Fine Properties. “So they’re putting their homes for sale as fast as they can, while their properties can still fetch a high price.”
But while more homes were going up for sale—boosted in some markets, like Boise, by new construction coming to market—the number of buyers dropped off.
“We were already at a price point where we [were] pushing so many buyers out of the market. Then once interest rates went up, that just doubled the problem,” says Rob Inman, a real estate agent and the director of operations at Boise’s Best Real Estate. “Even the people who can afford to buy right now, some of those people are holding back a little to see what interest rates and prices are going to do.”
Sellers who priced their homes similarly to those who sold in the spring found themselves out of step with the current market. Many recent sales went into contract a few months ago when mortgage rates were lower and the threat of a recession was barely a glimmer in most imaginations.
“I understand sellers want to get top dollar, but they have to understand the market’s come down. They have to reevaluate their expectations,” says Austin-based real estate broker Brad Pauly, of Pauly Presley Real Estate. “It’s still a seller’s market, but it’s not at the level of insanity that it was over the last two years.”
Instead of properties fetching a dozen offers, they’re now getting one or two, maybe even three—or none at all, say real estate agents.
“The bidding war days are gone on most homes,” says Ryan. “If the seller needs to sell, they’re slashing their prices to get a buyer in there.”
Price reductions abound in cheaper alternatives to big cities
Many smaller, more affordable cities outside of larger, pricier ones also saw big bumps in prices as the pandemic raged on. However, now costs have risen so much in many of these places that they’re no longer as attractive to those seeking bargains.
And as more homes have hit some of these markets, buyers are more likely to balk at higher prices.
That’s left sellers scrambling to adjust in places like Ogden, UT (No. 6), and Colorado Springs (No. 8), both renowned for their proximity to bigger cities. Ogden is only about 40 minutes from larger Salt Lake City, but homes cost about $50,000 less. Colorado Springs is just about an hour south of Denver. But buyers who don’t mind a commute can save themselves about $130,000 on the cost of a home.
During the pandemic, the wave of new residents pouring into Sacramento (No. 7) from pricier California cities, such as Silicon Valley’s San Jose and San Francisco, swelled. Prices ballooned as well, rising 22% from March 2020 to June 2022.
However, the Sacramento market has since slowed, hit by a trifecta of higher mortgage rates, stock and cryptocurrency market drops, and fewer buyers coming from the Bay Area, says Sacramento-area real estate agent Steve Ostrom, of Coldwell Banker Realty.
“In our area, there’s a lot of money that people put down” when they buy homes,” he says. Many kick in more than the traditional 20% down payment. But that’s harder to do with inflation and financial market turmoil. “The stock market hurt us more than the [mortgage] interest rates.”
Homes in the move-up range of $600,000 to $1 million “are getting hurt the most,” he says. “The sellers who want to really get their place sold are cutting prices a lot—5% if not more.”
Many smaller cities are also having to adapt to the new housing market
It isn’t just the superheated real estate markets that are being forced to adapt to a slowdown. Smaller markets such as Reno, NV (No. 1), Anchorage, AK (No. 4), Evansville, IN (No. 9), and Medford, OR (No. 10), are also reducing prices to get their properties under contract.
While homes are still considered affordable in Evansville, with a median price of just $246,000, they soared about 43% over the course of the pandemic. Those kinds of increases simply aren’t sustainable for locals, so something had to give. The small city is conveniently located between St. Louis and Indianapolis.
They shot up 36% in Anchorage, in the center, southern part of Alaska; rose 30% in Reno, on the California border about two hours from Sacramento; and increased 28% in Medford, in southern Oregon.
“It was easier for people to get out there and purchase properties when rates were low,” says Reno-based real estate agent Sarah Scattini. She’s also the president of the Reno/Sparks Association of Realtors. “Now with the mortgage rate hikes, it takes a little bit of the buying power away … so home prices have to come down to a realistic level.”
Today’s housing market is changing so fast, it’s hard to keep up. To help, we’ve kicked off “How’s the Housing Market This Week?” In this new series, we highlight the latest facts and figures to know right now. From the number of listings to home prices to mortgage rates and more, here are the latest updates on where these crucial indicators stand—and are heading—so that homebuyers and sellers can stay ahead of the curve.
Home prices are still soaring
The latest June data from Realtor.com® places the median home price nationwide at a record-setting $450,000. And, for the week ending July 16 (the most recent research available), home prices shot up by 16.6% compared with the same week last year. That’s 31 straight weeks of double-digit price growth, which helps explain the heart palpitations homebuyers have been feeling for the past eight months.
But this run-up can’t go on forever, with Danielle Hale, chief economist for Realtor.com, predicting “we’ll eventually see renewed slowing in price growth.” When that will happen is still anyone’s guess.
The number of homes for sale is getting stale
For the week ending July 16, new listings dropped by 3% year over year—the second straight week of declines. Hale theorizes this downward dip comes from panicked home sellers worried that the bacchanalian seller’s market that has showered them in bidding wars over the past two years might be waning.
“If sellers get spooked that they’ve ‘missed the peak’—a question I’ve been asked more times than I can count lately—the market will stagnate,” warns Hale.
Meanwhile, housing inventory overall rose by 29% over a year earlier, but with new listings dwindling, a larger portion of these homes for sale are “stale” ones that many buyers have already picked through and passed over. This might help explain why the share of homes that slashed their list price reached 14.9% in June versus 7.6% a year earlier.
All in all, this is bad news for home sellers, but good news for homebuyers desperate for a deal, although they’ll have to act fast (more on why next).
Homes are selling a tiny bit faster, but not much
For the week ending July 16, homes lingered on the market one day less than the same period last year. Given the typical home spends just 32 days on the market, this means the clock is truly ticking.
Mortgage rates are up, too
According to Freddie Mac, for the week ending July 21, the average 30-year fixed mortgage rate crept to 5.54%. That’s up from the previous week’s average of 5.51%, as well as the earlier week’s 5.3%.
And odds are, rates will continue upward as the Federal Reserve fights inflation by raising short-term interest rates.
“Buyers should rate-test their budgets, so that they know how to react in case mortgage rates climb again, as they are likely to do heading into the fall,” says Hale.