NEW YORK - The value of the United States housing market shrank by the most since 2008 as the pandemic boom fizzled out.
The total value of US homes declined by US$2.3 trillion (S$3 trillion), or 4.9 per cent, in the second half of 2022 after peaking at US$47.7 trillion in June, according to real estate brokerage Redfin. This was the largest drop in percentage terms since the 2008 housing crisis, when home values slumped by 5.8 per cent from June to December.
Home buyers, already facing record-high prices, took an additional hit from mortgage rates that more than doubled last year.
With less competition in the market, the median US home sale price was US$383,249 last month, down from a peak of US$433,133 in May.
“The housing market has shed some of its value, but most home owners will still reap big rewards from the pandemic housing boom,” said Redfin economics research lead Chen Zhao, adding that the total value of homes remains roughly US$13 trillion higher than it was in February 2020.
To be sure, home prices were not collapsing. In December, the total value of US houses was still 6.5 per cent higher than it was a year earlier.
How much home owners lost depended on where they bought. The biggest declines were in pricey cities like San Francisco and New York, while buyers who moved to pandemic boom towns were still seeing the returns on their investment, particularly in Florida.
That was especially true in Miami, where the total value of homes ballooned 20 per cent year on year to US$468.5 billion in December, the largest annual percentage increase among the top metro areas.
While the overall US housing market was down, Miami’s market had about the same value as when it peaked at US$472 billion in July.
As tech workers fled for more affordable locales, the total value of homes in San Francisco slumped by 6.7 per cent year on year in December, the most of any major US metro area, followed by Oakland and San Jose, which lost 4.5 per cent and 3.2 per cent respectively.
Other urban areas including New York and Seattle also saw annual declines.
BLOOMBERG
