These cities saw the biggest ups and downs in home prices last year

January 4, 2023 5:00 AM

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The highest interest rates in 20 years created a tumultuous year for home prices. 2022 saw record increases in the first six months, followed by a swift slowdown and pullbacks in some areas just months later.

Changes in median home values were even steeper in markets that boomed in the pandemic era, according to Realtor.com.

"It's the natural reaction to the sharp run-up in prices over the past couple of years now meeting the new, higher mortgage rates this year," said George Ratiu, Realtor.com senior economist and manager of economic research in a statement.

This year looks like it could be much of the same for several more months, with multiple research groups predicting average prices to fall annually during the first half, if not all, of 2023.

But some locations, mostly in the country's midsection, not only held on to their home-price gains of the 2021, but increased them further. Found in historically more affordable areas, "they offer home buyers a lot of value," Ratiu said.

Realtor.com examined median prices among the country's 100 largest cities in the one-year period between December 2021 and 2022, crunching the numbers to rank markets with the greatest home-price growth and depreciation over the past 12 months. Rankings were limited to cities with the single largest gain and decrease in each state to provide a representative nationwide picture.

Markets with largest price increases

Skyline of Omaha, Nebraska as seen from the water feature of Gene Leahy Mall

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Omaha, Nebraska

December 2022 median listing price: $342,500
December 2022 median listing price per square foot: $181
Year-over-year change in price per square foot: +21.6%

Despite a greater than 21% increase last year, prices in Nebraska's largest city were still about 15% below the national average of $212 per square foot, Realtor.com found. Omaha also benefited from its location about halfway between Chicago and Denver, pricier cities which saw their home values also rise in 2020 and 2021.

Omaha attracted the greatest interest from home shoppers in Chicago, Washington and Denver, Ratiu said.

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Jackson, Mississippi

December 2022 median listing price: $316,000
December 2022 median listing price per square foot: $144
Year-over-year change in price per square foot: +21.6%

Mississippi's capital led Southern states in its rate of home-price growth despite ongoing water-supply issues. The pace of price growth was interrupted by a dip midyear, before continuing upward again. While Jackson's rate of annual price acceleration was near the nation's highest, median costs were still approximately 30% below the national average.

Wichita, Kansas

December 2022 median listing price: $289,000
December 2022 median listing price per square foot: $135
Year-over-year change in price per square foot: +21.5%

Wichita's median home price made it the most affordable city on Realtor.com's top five list and also led Zillow to rank it recently as the best market for first-time buyers in 2023. Median listing prices climbed by $60,000 over the past year, and cost per square foot came in 35% below the national average.

Milwaukee, Wisconsin

December 2022 median listing price: $374,900
December 2022 median listing price per square foot: $204
Year-over-year change in price per square foot: +20.9%

While it was the most expensive market among the cities with the top median-price gains, Milwaukee's costs are still about 4% below the national average.

The city also may also offer some appeal to Midwestern buyers priced out of Chicago, its larger neighbor to the south located less than 100 miles away.

Little Rock, Arkansas

December 2022 median listing price: $299,900
December 2022 median listing price per square foot: $142
Year-over-year change in price per square foot: +20.1%

Interest in the Little Rock market also grew after prices increased rapidly in other nearby cities. The Arkansas city saw a year-over-year price gain of over 20% per square foot. Like Wichita, Little Rock was highlighted by Zillow as a leading market for first-time home buyers.

Markets with largest price decreases

Warm light of early morning over Boise Idaho skyline

City of trees Boise Idaho in the morning

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Boise, Idaho

December 2022 median listing price: $509,900
December 2022 median listing price per square foot: $263
Year-over-year change in price per square foot: -5.8%

One of the hottest regions during the pandemic saw prices rise more than 70% from early 2020 to mid 2022, reflecting the Boise area's popularity as newcomers arrived from more expensive coastal cities. But the sudden surge also led it to become one of the most overvalued markets in the country, a study from Florida Atlantic University and Florida International University determined last year.

"The prices were out of alignment," Ratiu said. By spring, Boise led the nation in the share of listed homes seeing price cuts, according to Redfin, helping bring down median price per square foot by almost 6% for the full year.

Denver Metro Residential Area. Colorado Architecture.

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Denver, Colorado

December 2022 median listing price: $599,990
December 2022 median listing price per square foot: $280
Year-over-year change in price per square foot: -5.7%

The Mile High City saw almost as large a median-price drop as Boise, as low local and state property taxes appealed to incoming residents from more expensive markets.

But a 35% surge in home values between 2020 and mid 2022 turned into a 5.7% annual decrease by mid December.

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Sacramento, California

December 2022 median listing price: $591,500
December 2022 median listing price per square foot: $328
Year-over-year change in price per square foot: -3.1%

Among several California markets that saw housing values decline, Sacramento experienced the largest drop, at 3%. However, home prices in the state's capital were still 50% above the national average, Realtor.com said.

A wave of buyers from the Bay Area to the southwest drove housing costs up 35% in Sacramento during the pandemic.

Aerial view French Quarter with extant historical buildings from 19th century. The historic district section of the city of New Orleans, Louisiana, USA, morning warm light.

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New Orleans, Louisiana

December 2022 median listing price: $325,000
December 2022 median listing price per square foot: $179
Year-over-year change in price per square foot: -2.7%

Falling almost 3% year over year, home prices in New Orleans experienced the largest decrease in the South. Median listing prices in the Big Easy are currently about 15% below the national average. An expected rise in insurance costs reduced some of the demand for housing in the area.

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Chicago, Illinois

December 2022 median listing price: $320,000
December 2022 median listing price per square foot: $188
Year-over-year change in price per square foot: -1.6%

The Midwest's largest market saw a more modest drop in median prices compared to other cities, but costs were still close to 2% lower compared to December 2021.

An unemployment rate higher than the national average and foreclosure rates could be contributing to the softening prices, with real estate data provider Attom recently noting that the local market is vulnerable to a housing decline.