We're seeing a shift in the housing landscape: in mid-Q3, the price per square foot fell year-over-year in 36 out of the 50 largest U.S. metro areas, signaling a broader cooling trend across major markets. Nationally, this measure dropped about 2% compared to last year, marking the tenth consecutive month of annual softening. As the quarter wrapped up, the market's momentum slowed, with some sellers making more significant price cuts to bridge the gap with buyers’ expectations. Persistently high mortgage rates have made affordability a real challenge—especially in regions that experienced rapid price growth during the pandemic—so sellers are finding themselves adjusting more in line with buyers. An economist noted that many of the markets that boomed during the pandemic are now giving back some of those gains, helped by inventory levels that are above what we saw before 2020. Having specialized in evaluating bank-owned and distressed properties in the Seattle area since 2005, I’ve watched these cycles play out before. Understanding market shifts is key to navigating opportunities and risks, whether you’re buying or selling in today’s environment.
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