Home Values Decline Annually in These 4 Major U.S. Cities: A 2024 Market Shift

Recent data indicates a clear divergence in the U.S. housing market, with home values now falling on an annual basis in several major metropolitan areas, primarily in the South and West, while the Midwest and Northeast regions demonstrate continued resilience and growth. This shift, highlighted by the authoritative S&P CoreLogic Case-Shiller Index, signals a significant change from the widespread price increases seen in recent years. For homebuyers and sellers, understanding these regional variations is critical for making informed decisions in the current climate.

What Does the S&P CoreLogic Case-Shiller Index Reveal?

The S&P CoreLogic Case-Shiller Index is a leading measure of U.S. residential housing prices, tracking changes in the value of single-family homes across major metropolitan areas. Unlike simple median price calculations, this index uses a repeat-sales method, which provides a more accurate gauge of pure price appreciation by comparing the sale prices of the same properties over time. According to the latest data from May 2024, the national index showed a 2.3% year-over-year increase. However, this marks the slowest pace of growth since July 2023, underscoring a broader cooling trend. More notably, the data reveals that four major cities have now crossed into negative annual territory, confirming a pullback in some of the nation's previously hottest markets.

Which Major Cities Are Experiencing Annual Price Declines?

The cities where home values have decreased compared to a year ago are concentrated in the West and South. Based on our experience assessment, these markets experienced some of the most aggressive price surges during the pandemic-era boom and are now undergoing a necessary correction. Factors such as affordability constraints, shifting migration patterns, and local economic conditions are contributing to these declines. For instance, as mortgage rates have remained elevated, the high price points in cities like Seattle and San Diego have priced out a larger segment of potential buyers, reducing demand and putting downward pressure on values.

Why Are the Midwest and Northeast Markets Showing Strength?

In contrast to the cooling coastal markets, many areas in the Midwest and Northeast continue to see stable or rising home prices. The resilience in these regions can often be attributed to greater relative affordability. Cities like Cleveland, Chicago, and Philadelphia offer more accessible entry points for first-time homebuyers. Furthermore, strong local job markets and a slower pace of the previous boom-and-bust cycle have created a more balanced environment. This dynamic suggests that buyers priced out of Sun Belt and Western metros may be finding opportunities in these traditionally steady markets.

What Should Buyers and Sellers Consider in This Market?

For sellers in markets experiencing declines, realistic pricing is paramount. Overpricing a home based on peak 2022-2023 valuations can lead to extended time on the market and eventual price reductions. A comparative market analysis (CMA) from a local real estate agent, using data from the last 3-6 months, is essential. For buyers, these regional shifts may present opportunities for less competition and more negotiating power in certain cities. However, it's crucial to research local trends thoroughly rather than relying on national headlines. Mortgage lending rates remain a key variable for all parties, influencing monthly payments and overall purchasing power.

The U.S. housing market is not a monolith. The latest data confirms that strategic localization is more important than ever. While some major cities are correcting, others are holding steady, demonstrating the unique economic drivers of each region. Both buyers and sellers should focus on hyper-local data and consult with real estate professionals to navigate this nuanced landscape successfully.