Redfin Reveals That Since The Housing Crisis Of 2008, Home Values Have Fallen Sharply

In the 15 years since 1970, the U.S. housing market has dropped $2.3 trillion, the steepest fall in its value in 15 years.

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In 2022, Redfin found that total home values dropped by 4.9% from the previous year to $45.3 trillion.  According to Trade Algo, during the 2008 housing market crash, home values fell 5.8% from June to December.

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The decline in home values is largely the result of rising mortgage rates that have discouraged buyers from entering the market, according to Redfin. During the height of the pandemic two years ago, Boise, Idaho, Seattle and the Bay Area all saw blazing hot housing markets.

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In the second half of 2022, these three cities saw the largest declines in home values:

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• San Francisco (-6.7%)

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• Oakland (-4.5%)

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• San Jose (-3.2%)

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A decline in year-over-year employment occurred only in three other metropolitan areas:

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• New York City (-1%)

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• Seattle (-.4%)

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• Boise, Idaho (-.3%)

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Redfin says home values are still higher now than when the pandemic began, despite the decline last year. While the global health crisis was at its height, interest rates were at their lowest and it would have been a good time to buy.

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Chen Zhao, senior manager of economics at Redfin, says that many people were left behind. Despite the low mortgage rates in 2021, many Americans couldn't afford to buy homes, which prevented them from building wealth.

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There were declines in some cities, but not in all. Redfin reports double-digit home price increases in midsize towns in the South. Among them are:

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• Miami (+19.7%)

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• North Port-Sarasota, Florida (+17.8%)

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• Knoxville, Tennessee (+17.7%)

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• Charleston, South Carolina (+17.4%)

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• Lakeland, Florida (+16.9%)

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In the midst of spring homebuying season, Redfin's data lands just in time. This month, mortgage rates are 6.5%, nearly double what they were a year ago. In January, Redfin reported a 1.5% rise in the median home sale price to $383,249.

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Despite record home prices and record-high mortgage rates last year, realtors expect 2023 to be markedly different than last year.

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Today, Wall Street Journal reporter Veronica Dagher tells CBS News that buyers are getting used to higher interest rates and sellers are lowering their prices as a result.

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Dagher said sellers are starting to realize that a certain price my neighbor got a year ago may not be the same price they get now.

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