San Jose, Seattle Lead Q2 Retreat on Home Prices
Report says deceleration of US home prices fastest since 1970s, inventory surge largest in 12 years.
San Jose recorded the steepest drop in home prices during the second quarter among the top 50 US markets, a 5.1% decline that saw average home prices in the heart of Silicon Valley plunge $75,000 from April’s record high of $1.56M to $1.49M by the end of June.
According to a new report from Black Knight, home prices dropped in 12 of the 50 major markets in Q2, with Seattle (-3.8%), San Francisco (-2.8%), San Diego (-2%) and Denver (-1.4%) seeing the sharpest pullbacks on home prices.
The company’s latest Mortgage Monitor Report said the downward trend in home prices in June marked the greatest deceleration in US home price growth on record, a slump not seen in nearly 50 years.
June’s slowdown in annual home price growth—dropping from 19.3% to 17.3%—coincided with the largest single-month gain in homes listed for sale in 12 years, Black Knight said. Black Knight reported a seasonally adjusted 22% increase in the number of homes listed for sale over the past two months.
While the listings have risen from a low of 1.7 months of inventory at the beginning of the year to 2.6 months as of June, the report noted that the number of listings is still more than 50% less that pre-pandemic levels, an inventory shortfall of more than 700K listings nationwide.
The company attributed surging home inventory to a steep decline in sales activity due to rising rates and the lowest levels of home affordability in nearly 40 years. Seasonally adjusted home sales are down more than 21% since the start of the year, Black Knight said, with the data suggesting further slowing in coming months.
“The pullback in home price growth in June marked the strongest single month of slowing on record, dating back to at least the 1970s, and it wasn’t even close,” said Ben Graboske, president of Black Knight’s Data & Analytics Division, in a statement accompanying the report.
“For context, during the 2006 turndown, the strongest single-month slowing was a 1.19 [decline],” Graboske added.
Black Knight’s list of the 10 markets that saw the steepest decline in home prices since April includes six California metros. Rounding out the top 10 are Los Angeles (-1.3%); Sacramento (-1.1%); Portland (-0.8%); Riverside (-0.7%); Phoenix (-0.6%); and Washington DC (-0.3%).