San Jose, California
Real estate prices across the U.S. logged an annual gain of 4.7% in August, but the growth rate, hindered by overambitious sellers, is the lowest seen in four years, according to a report Monday from Redfin.
The price growth rate dropped for six consecutive months and hasn’t been this low since August 2014. The median house price now stands at $300,900, the report said.
Price growth was the highest in San Jose, a large city within California’s wealthy tech hotbed, Silicon Valley. House prices rose 22.3% in the year to August to a median of $1.18 million, according to the Redfin data.
Prices in Las Vegas followed, logging 12.2% year-over-year price growth, followed by Tacoma, Washington (12.1%); San Francisco (12%) and Grand Rapids, Michigan (10.8%).
Chicago was the only major metropolitan area to see a price decline in August, as values dipped 0.5%, the report said.
Despite prices moderating, new listing prices keep accelerating, Redfin senior economist Taylor Marr, said in the report. But "this mismatch between seller expectations and reality is fueling an increase in price drops in metros across the country," Mr. Marr added.
Nearly 30% of homes on the market in August received a price cut, the largest number on record since Redfin began tracking the metric in 2009, and a 3.4% increase over last August.
As overall price growth fell, so did the number of homes selling for above asking price. In August, 23.6% of homes sold for above ask, compared to 25% one year ago.
On the West Coast, the robust markets of Portland, Oregon; San Jose and Seattle are starting to come back to earth, with continuing increases in inventory and declining sales.
In San Jose and Seattle, the supply of homes was up nearly 50% year over year, while in Portland, inventory increased 25% in the same time.
The increases are the result of more sellers and fewer buyers.
San Jose, Seattle and Portland saw sales declines of 16%, 19% and 6%, respectively.
Rebecca Walter, a Redfin agent in Portland, said in the report that pricing right is more important than ever.
"I tell sellers that the worst thing you can do is overprice your home. If you have to drop the price, you can’t recreate the same excitement and fervor as when your home first hits the market," Ms. Walter said. "Pricing too high can ultimately result in getting less than market value, below what you likely could have gotten if you priced at market value from the start."