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Meanwhile, new research suggests people in high-cost metro areas are searching for more affordable places to live.
The overall pace of home price increases across the country slowed slightly heading into the summer months, with prices in Seattle, a city that’s had an especially hot housing market in recent years, recording a notable dip, according to data released on Tuesday.
A S&P CoreLogic Case-Shiller home price index for 20 major cities posted a 2.4% year-over-year gain in May, down from 2.5% in April. But the home price measure for Seattle slipped 1.2% compared to where it was a year prior.
Philip Murphy, managing director and global head of index governance at S&P Dow Jones Indices, said in a statement that the slowdown in Seattle marked the first negative year-over-year change recorded in a major city in a number of years.
Whether the trend seen in Seattle will spread, he added, remains to be seen.
In other cities prices in May were more upbeat. Las Vegas, Phoenix and Tampa, Florida had the highest year-over-year gains among the “20-City Composite,” at 6.4%, 5.7% and 5.1% respectively. A nationwide index posted a 3.4% annual gain in May, down from 3.5% in April.
“Nationally, year-over-year home price gains were lower in May than in April, but not dramatically,” Murphy said. Among the 20 major U.S. cities tracked with the indices, he added, average year over year gains have been declining “for the past year or so.”
Seattle—amid a boom in the local tech sector—is one of the cities around the U.S. that saw home prices surge upwards in recent years, fueling problems with housing affordability as incomes have not kept up. Places like San Francisco and New York are facing similar issues.
(For more information about the indices see here. Chart: Route Fifty, Data: S&P CoreLogic Case-Shiller)
A report the real estate brokerage Redfin released Tuesday suggests people are aiming to decamp from these higher cost cities, in favor of more affordable ones.
The share of people looking for homes outside of where they live has been at record highs since late 2018, the company says.
“People are increasingly looking to leave expensive coastal metros like New York, San Francisco and Los Angeles," Redfin’s chief economist Daryl Fairweather said.
While low mortgage rates have made buying a home more affordable, she added, it’s not enough for average homebuyers in markets with steep housing prices and higher taxes.
Some of the metro areas seeing high levels of interest, based on Redfin’s data include Phoenix; Sacramento, California; Atlanta; Las Vegas; Austin, Texas; and Tampa.
These findings are based on home-search activity on Redfin’s website through the second quarter of this year.
Most of the sought-after destinations are relatively affordable, particularly when compared to places from which they are luring the most new residents, the company’s report says.
It notes that in Phoenix the median home price is around $280,000. In contrast, the top places where the city is attracting people from include Los Angeles and Seattle, where median home prices are around $632,000 and $580,000 respectively, according to the company.
Redfin says based on its data, the places with the greatest outflows, meaning the number of people looking to leave the metro area minus the number of people seeking to move into the area, include: New York City, San Francisco, Los Angeles, Washington, D.C. and Chicago.
“The homebuyers who are heading out of town in search of affordability don't just want to save a few hundred dollars per month, they want to save thousands of dollars per month,” Fairweather said. “The only way to achieve that kind of cost savings is to move somewhere more affordable.”
Bill Lucia is a Senior Reporter for Route Fifty and is based in Olympia, Washington.