There has been quite a flip-flop in real estate prices over the last five years. In the midst of the pandemic, certain large cities saw a temporary dip in demand as people looked toward less dense suburbs, but demand gradually rebounded as infection cases and restrictions eased.
There is an influx of people looking to move to Phoenix and many other Southern and Midwestern cities, which led to double-digit home price increases in one month. However, the market is now disproportionate to the developer hype.
The Midwest has been particularly prone to this type of flip-flopping, according to Realtor.com’s annual list of cities where real estate values have increased and dropped the most — while Wichita’s prices rose by 21.5% per square foot between December 2021 and 2022, Idaho’s Boise prices fell by 5.8%.
In Nebraska’s Omaha, prices increased 21.6% year-over-year, matching Jackson as the city with the fastest price increase. As more and more buyers are priced out of more expensive cities like Denver and Chicago, the birthplace of investment magnate Warren Buffett has seen a surge in buyers.
Two weeks ago, the price per square foot went up from $149 to $181 but is still below the country’s average of $212. A lower-than-national-average price has attracted buyers priced out of other markets to Missouri’s Jackson, Kansas’ Wichita, and Wisconsin’s Milwaukee as well.
A 5.7% decrease in housing prices was recorded in Denver, while a 3.1% decrease was recorded in Sacramento, California. A median home in Sacramento still lists for $591,500, making it the most expensive city on the list, but demand has shifted significantly since the pandemic.
The metropolises of New Orleans and Chicago stand out from those that have recovered from short-term popularity bursts. While both cities are still experiencing strong demand, their prices per square foot dropped by respectively 2.7% and 1.6% as they adjusted from abnormally high prices a few months ago. These cities are likely to see strong demand for years to come due to their diversified economies.
