In October, 53% of homes saw their “Zestimates” decline, the most since 2012 and up from just 16% a year earlier. Losses were most widespread in the West and South.
In fact, those regions have housing markets where nearly all homes declined in value over the last year. Denver topped the list with 91%, followed by Austin (89%), Sacramento (88%), Phoenix (87%) and Dallas (87%).
In addition, most homes also dropped from their peak valuations, with the average drawdown hitting 9.7%. While that has soared from 3.5% in the spring of 2022, it’s still well below the 27% average drawdown in early 2012.
To be sure, lower home values are just losses on paper and aren’t realized by homeowners unless actual sale prices undercut their initial purchase prices.
By that score, homeowners are still ahead as Zillow data shows that values are up a median 67% since the last sale, and just 4.1% of homes have lost value since their last sale.
The lower values come as the housing market has been frozen for much of the past three years after rate hikes from the Federal Reserve in 2022 and 2023 sent borrowing costs higher, discouraging homeowners from giving up their existing ultra-low mortgage rates.
But the dearth of new supply kept home prices high, shutting out many would-be homebuyers who were also balking at elevated mortgage rates.
“Next year is really the year that we will see a measurable increase in sales,” Yun said at a conference on Nov. 14. “Home prices nationwide are in no danger of declining.”
