Revisiting pandemic “boomtowns” - a study in staying power

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Published Date 5/1/2024

The shot heard ‘round the world was the boom many cities experienced during the pandemic. Realtor.com’s Evan Wyloge reports on America’s “pandemic boomtowns”—cities that grew rapidly as remote workers fled there for lower costs of living during the height of COVID-19. Where are they now after a wild, four-year roller-coaster ride?

“Homes in these towns were selling at breakneck speeds—often well above the asking price—as inventory levels shrank to record lows,” he says. “In Denver, for instance, properties were flying off the market in less than a week. In Austin, TX, homes were fetching an average of 10% above the listing price. And in Raleigh, NC, the number of homes for sale dwindled by 80%.”

When spring 2022 came along, however, the U.S. Federal Reserve began cranking up interest rates to combat inflation, causing a major turn in the market. “Potential buyers and sellers began to feel sidelined,” says Wyloge. “And there’s nowhere that felt the burn more than the nation’s pandemic boomtowns.”

He compares it to the stomach-churning free-fall part of the roller-coaster ride. Except perhaps this is the part when the brakes are applied, the ride is over, and it takes a bit to steady yourself once you try walking again. “Today, that electric real estate climate in these cities has fizzled. The depleted inventories have been replenished, homes linger on the market, and sellers increasingly adjust to modest price expectations,” says Wyloge.

The “new normal” in these boomtowns has been challenging for sellers, who must now adjust their expectations. The memory of boom time still feels fairly fresh, a few Realtors in the Austin, TX area agree, even though they also admit there is now a lot more breathing room.

Wyloge acknowledges that this rebalancing—between sellers' expectations and buyers' budgets and options—is a theme. “At Realtor.com, we can see the areas that had the most dramatic pandemic surges have fallen when we examine the time it takes homes to sell, or what's happened with inventory or prices.”

In Austin, the median list price for a home is now $549,733 — down 9% since the pandemic peak. The median sale price dropped from 9% above the initial list price to 3.5% below. The city’s vibrant arts scene and booming tech sector attracted a surge in population during the pandemic, as remote work allowed people to choose where they lived independently of their employers.

Properties have gone from selling above the list price to a more typical sale-to-list price ratio and experts predict the Austin housing market will continue to be affected by the ups and downs of the temperamental tech industry — including downsizing at Elon Musk's Tesla and Oracle announcing a move of its headquarters to Nashville.

Tampa, FL. March 2024 median list price is $419,000 with listing days-on-market increasing from 29 to 51. Its Gulf Coast location was an attractive magnet. But wages there are not supporting that growth, say those in the Tampa know. Add to that significant increases in property taxes and insurance, and people are now getting priced out. People who moved there for affordability are now moving back out, says local Realtors.

Boomtown Raleigh, NC now has a median list price: $449,990 and homes there take an average of 42 days to sell. Wyloge says Raleigh, part of the Research Triangle, is known for its educational institutions and technological research, contributing to its robust local economy. “The metro saw days on the market drop dramatically during the pandemic to an astonishing 11. More recently, it's back to 42, reflecting a competitive market that is normalizing,” he says.

The mile-high city of Denver now boasts a median list price of $619,900, but that represents a drop from 8% above the initial list price to 2.5% below. Located at the base of the Rocky Mountains, Denver provides not only a stunning backdrop for daily life, including for outdoor enthusiasts. The pandemic only turbocharged the trend after people had been drawn there for decades. “The housing market adjustments include a slight return to pre-pandemic sale-to-list ratios and inventory that looks more like pre-pandemic conditions, indicating a stabilization in what is still a relatively strong market,” says Wyloge.

Nashville and Salt Lake City differ in median price by only a sliver — $558,990 and $579,999 respectively. Nashville’s rich musical heritage and vibrant cultural scene make it a unique place to live, and Salt Lake City, with nearby ski resorts and natural parks, offers a blend of urban and outdoor living. Both metro areas’ sales have returned to a slower pace.

What happens in Vegas stays in Vegas? Today’s Las Vegas median list price of $470,000 is down only about 2% since the pandemic peak. The glittering city has seen its fair share of ups and downs over the years, having led the mid-2000s real estate bubble as well as the 2008 housing crash, according to Wyloge. “The Sin City market has historically been more affordable than average, a trend that was reversed during the pandemic, with home prices topping the national average. Now, with prices still a tad below the pandemic peak but rising again, the city's real estate could be close to a full-price rebound.”

Realtor, TBWS

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