There’s no need to pull the emergency parachute and sell all your real estate before prices fall further—at least in most parts of the country.
According to a new report from real estate brokerage and listing site Redfin, almost 6% of today’s homeowners are at risk of losing money if they put their property on the market. That’s nothing to get too upset about, as it’s a historically low number, well below pre-pandemic averages, even if it’s up from 4.4% a year ago.
Condos Have Lost Their Appeal in Many Places
However, location plays a pivotal role in determining whether your home’s value has increased or decreased. In San Francisco, for example, there’s a 20% chance that your home has declined in value since you purchased it. In contrast, in Providence, Rhode Island, the chances are virtually zero.
Additionally, condos have a higher risk of declining in value compared to single-family homes. In Sunbelt regions, increasing HOA fees and insurance have made condos far less appealing than they once were.
Post-Pandemic Buyers Are at the Greatest Risk of Losing Money
The Redfin data is theoretical, however, as it assumes that sellers will sell in today’s market at current prices. It doesn’t factor in that sellers may choose to wait to see what other offers they might attract.
While the statistics point to a worrying trend of real estate losing value in increasing numbers, the highest percentage—16.4%—at risk are those who purchased at the top of the market in the frothy post-pandemic frenzy of bidding wars and rock-bottom rates.
Comparatively, 9% of today’s sellers who purchased their homes during the pandemic…