10 US Real Estate Markets To Avoid for Now

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Real estate is often thought of as a "safe" investment because prices tend to trend upward over the years. But in some major cities, year-over-year price increases are lagging behind the national average of 10.71 percent. This can be a warning sign of a real estate market to avoid. Other signs include high levels of for-sale inventory, properties that stay on the market for longer than average (the current average time to close is 38 days) and a large share of listings with price cuts.

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GOBankingRates analyzed these factors and more across the 200 largest metro areas to find the 10 real estate markets that prospective buyers should avoid right now.

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10. Salinas, California

• Home value in December 2022: $822,773

• Home value in December 2021: $796,065

• Change in home value (%): 3.36%

• New for-sale inventory (active unique listings): 479

• Mean days to close: 31

• Share of listings with price cuts: 20.3%

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9. Los Angeles

• Home value in December 2022: $945,424

• Home value in December 2021: $909,306

• Change in home value (%): 3.97%

• New for-sale inventory (active unique listings): 15,657

• Mean days to close: 30

• Share of listings with price cuts: 21.88%

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8. Pittsburgh

• Home value in December 2022: $210,373

• Home value in December 2021: $203,505

• Change in home value (%): 3.37%

• New for-sale inventory (active unique listings): 6,154

• Mean days to close: 44

• Share of listings with price cuts: 23.34%

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7. New York

• Home value in December 2022: $626,122

• Home value in December 2021: $579,214

• Change in home value (%): 8.1%

• New for-sale inventory (active unique listings): 28,958

• Mean days to close: 59

• Share of listings with price cuts: 14.26%

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6. San Francisco

• Home value in December 2022: $1,444,267

• Home value in December 2021: $1,434,173

• Change in home value (%): 0.7%

• New for-sale inventory (active unique listings): 5,056

• Mean days to close: 26

• Share of listings with price cuts: 21.94%

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5. Austin, Texas

• Home value in December 2022: $541,535

• Home value in December 2021: $540,113

• Change in home value (%): 0.26%

• New for-sale inventory (active unique listings): 9,738

• Mean days to close: 28

• Share of listings with price cuts: 30.59%

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4. San Jose, California

• Home value in December 2022: $1,643,354

• Home value in December 2021: $1,594,025

• Change in home value (%): 3.09%

• New for-sale inventory (active unique listings): 1,497

• Mean days to close: 29

• Share of listings with price cuts: 21.81%

3. Phoenix

• Home value in December 2022: $452,881

• Home value in December 2021: $434,518

• Change in home value (%): 4.23%

• New for-sale inventory (active unique listings): 21,874

• Mean days to close: 27

• Share of listings with price cuts: 35.75%

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2. Reno, Nevada

• Home value in December 2022: $546,514

• Home value in December 2021: $545,950

• Change in home value (%): 0.1%

• New for-sale inventory (active unique listings): 1,763

• Mean days to close: 33

• Share of listings with price cuts: 29.87%

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1. Boise, Idaho

• Home value in December 2022: $481,736

• Home value in December 2021: $502,904

• Change in home value (%): -4.21%

• New for-sale inventory (active unique listings): 2,909

• Mean days to close: 29

• Share of listings with price cuts: 34.3%

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Methodology: GOBankingRates looked at the 200 largest metro statistical areas (MSAs) according to their real estate markets and found the following 10 factors: (1) 1-year percent change in home value; (2) 1-year change in home value in USD; (3) 2-year percent change in home value; (4) 2-year change in home value in USD; (5) for-sale inventory; (6) mean days from listing to pending; (7) mean list-to-sale ratio; (8) mean days from pending to close; (9) share of listings with a price cut; and (10) mean price cut. All data was sourced from Zillow's December 2022 data. All 10 factors were then scored and combined with the highest score being the worst. In final calculations, factors (1), (2), (9) and (10) were weighted 2x and factor (5) was weighted 0.5x. All data was collected and is up to date as of Feb. 7, 2023.

This article originally appeared on GOBankingRates.com: 10 US Real Estate Markets To Avoid for Now