Where ‘COVID Boomtowns’ are Cooling

When COVID-19 hit the United States in early 2020, the national housing market took off. Although many urban areas – especially big, densely populated cities like New York City – have experienced what Zillow has determinedly referred to as a “reshuffling” (vs. an exodus), the suburban and rural areas of the country took home-price appreciation to new heights. That trend continued (right along with eviction moratoriums and remote work) in 2021. Markets like Boise, Idaho, and the surrounding region appreciated by more than 30 percent over the first nine months of 2021. Salt Lake City, Utah, posted numbers that were even higher. Now, however, things may be starting to slow down.

According to Zillow Group Inc., incidentally the parent company of the i-buyer that recently put its acquisitions wing on hold – home-price appreciation slowed on a national level for the second straight month in September of this year. However, that cooling trend was not evenly spread around the country.

“The number of homes with price cuts is growing,” observed Bloomberg Wealth contributor Prashant Gopal. “Even some of the hottest areas where workers from large, urban cities sprawled out to, such as the counties including Portland, Maine, and Tacoma, Washington, have had cuts on more than 40 percent of listings.” Readers should note Gopal solely cited Redfin data for the latter measure.

When Zillow analysts looked at the counties around the country with the biggest share of home listings with price reductions, they identified multiple areas of the country that had previously been hot destinations for buyers. However, now the demand in those counties is falling.

Here are the top 5 “COVID Boomtowns” now cooling toward the end of 2021:

1. Canyon County, Idaho (Boise City)
   81 percent of listings have had prices cut at least once.
2. Utah County, Utah (Provo)
   65 percent of listings have had prices cut at least once.
3. Davis County, Utah (Ogden)
   64 percent of listings have had prices cut at least once.
4. Box Elder County, Utah (Ogden)
   64 percent of listings have had prices cut at least once.
5. Ada County, Idaho (Boise City)
   61 percent of listings have had prices cut at least once.

Other notable metro areas on the list include Denver, Colorado, where more than half of the listings have at least one price cut on record, and Fresno, California, where more than half of the listings have at least one price cut on record. However, many of the properties with price cuts are new construction, so some developers have noted that they “always have 100 to 200 houses available at any given time” and may elect to adjust the price more than a typical seller would.