Are US home prices decreasing or increasing? It depends on where you’re looking to buy. The real estate market is so location-based that the price-growth disparity between Miami and San Francisco is near a 30-year high.
According to a Redfin report, housing trends have recently become the most local they have been since 2009. A glaring contrast, Miami home prices are up 10.9 percent while San Francisco home prices are down 10.1 percent, compared to last year.
The city by the bay is, overall, still more expensive with San Francisco’s average sale price 2.9 times higher than Miami’s.
Illustrating the point, the variation between real estate prices in Miami compared to those in San Francisco are a direct result of buyers flocking to Florida, while California loses prospective consumers.
The 21-percentage-point spread in price growth is almost the greatest in more than three decades.
“The stark difference in home-price dynamics between the Bay Area and Miami may be a reflection of a long-term, pandemic-fueled shift in where people choose to live,” said Taylor Marr, Redfin deputy chief economist. “The fact that Miami prices are holding up well despite the national pullback in homebuying suggests the relative popularity of Florida is here to stay.”
While the Bay Area continues to be more expensive than South Florida, that gap has been steadily closing in recent years. The median home-sale price is 2.9 times higher in San Francisco at $1.42 million versus Miami’s $483,000. In February 2020, coincidentally when the pandemic began, average home prices in the Bay Area were 4.4 times higher than in South Florida.
Following in largest price differentiations are Seattle (down 9.4%) versus Miami (up 10.9%), San Francisco (down 10.1%) versus Tampa, Florida (up 7.7%), Seattle (down 9.4%) versus Tampa (up 7.7%), and San Francisco (down 10.1%) versus Atlanta (up 6.6%).
“Insights from other parts of the country can create confusion because they don’t necessarily reflect what’s happening on the ground in your neighborhood,” said Steve Centrella, Washington DC Redfin Premier agent. “For instance, demand for downtown condos is returning here [in Washington DC] as government employees return to the office, so buyers may encounter competition for desirable units. That may not be the case in other parts of the country.”
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