Throughout 2019, you couldn’t come across a real estate headline without the word “cooldown” when it came to the US housing market forecast. However, new data on home price gains shows that, while there may have been a nationwide cooldown, things are heating up once again as 2020 approaches.
Real Estate Data on US Home Price Gains
CoreLogic reports that in September, home prices saw an increase of 3.2%, up from a 3.1% gain in August. This real estate data suggests that while there may have been a US housing market cooldown during what was supposed to be the hottest time of the year for the real estate market, it ended in late summer.
As you can see from the chart below, home price trends showed drops throughout 2018 and into 2019. August and September, however, is where it seems the tides began to change for the US housing market.
Home Prices Trends in Major US Cities
In the 10 largest metropolitan areas by population, the average home price growth was at 1.5%- the same as it was in August. However, the report shows that the average home price growth across the 20 largest metropolitan areas by population was up from the month before (2%), with an increase of 2.1%. Looking at the metro areas individually, 8 saw a slowdown in home price growth. Still, this amounted to fewer areas from the month before. In August, 11 of the top metro areas saw a slowdown in property price growth. The fact that more cities are seeing higher increases month-over-month in major areas of the US housing market further demonstrates that the cooldown ended in late summer.
The cities among the fastest-growing housing markets (from the top 20 metros) were:
- Phoenix, AZ (+5.7%)
- Charlotte, NC (+4.6%)
- Tampa, FL (+4.5%)
San Francisco, however, is one of the major cities that has seen a drop in property price growth. Home prices are actually falling- a 0.7% decrease year-over-year. Las Vegas is another real estate market that seems to be continually cooling down. In September of 2018, the Las Vegas real estate market experienced 13.4% year-over-year price growth. Compared to September 2019’s year-over-year growth of only 2.9%, it’s clear that this housing market is returning to normal.
Learn More: Las Vegas Real Estate Market Returns to Normal
This cooldown in once-hot Western real estate markets is actually a positive change for local real estate investors and homebuyers. With slowing price gains, there is finally room to enter the market for many.
Your Next Move
As a real estate investor, you may have been discouraged from entering the US housing market this year and buying an investment property in the face of a cooldown. National real estate trends show that this cooldown is behind us in many major metro areas.
Now is a good time to invest in Phoenix real estate before price gains continue and investment property becomes unaffordable. It’s also a good time to invest in Las Vegas real estate. The housing market is returning to a balanced state here. This is a great time to get your hands on a rental property as Las Vegas investment properties are known to produce great monthly cash flow, with almost half of the population residing in rentals. Although price gains are cooling here, a buy and hold investment strategy is sure to prove profitable.
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