What are the odds of your home value raising or falling over the next year?
CoreLogic, is a highly respected California based corporation, providing financial, property, and consumer information, analytics, and business intelligence. The company analyzes information assets and data to provide clients with analytics and customized data services.
Each month they conduct an analysis to predict the rise or fall of home values in many parts of the country. I’m going to focus on their September 2022 Home Price Index which predicts home values through July 2023.
Nationwide
Home prices increased nationwide by 15.8% from July 2021 to July 2022. But due to our current economic condition, home prices actually declined 0.3% from June 2022 to July 2022. But, nevertheless, CoreLogic predicts that prices will rise 0.3% from July 2022 to August 2022. (The data is not yet ready for August 2022) On a yearly basis the prediction is for a 3.8% rise for the time period between July 2022 and July 2023.
While annual home price growth slowed for the third consecutive month in July, the year over year picture was very strong as mentioned above, at 15.8%. The slowdown in growth, according to CoreLogic is the rapidly rising mortgage rates which kept many potential homebuyers out of the market. The fall of 0.3% between June and July of 2022 was not seen in these particular months between 2010 and 2019. It’s also important to remember that the 15.8% rise in home prices is expected to slow considerably to 3.8% by July 2023. In the past year no state through July 2022, posted an annual decline in home prices.
The Local Scene
Let’s hear it for Florida! The Sunshine state posted the highest home price increase year over year of any state in the country with a whopping 29.6% rise. Following, were South Dakota (23.7%) and Tennessee (23.2%)
Large cities that continued to see strong price growth in July 2022 include Miami on top with 27.1% year over year.
Cities where CoreLogic predicts home values to fall significantly in the next 12 months include Bremerton-Silverdale Washington, Crestview-Fort Walton, Florida, Bellingham, Washington, Reno, Nevada, Boise, Idaho, and San Francisco.
Of the 392 housing markets it looked at, CoreLogic found 125 markets have a greater that 50% chance of seeing home prices decline over the next 12 months. In July, the firm found 98 markets had a greater than 50% chance of a home price decline over the next 12 months. In June, that number was just 45, and in May, it was only 26.
The reasons for the increasing number of metro areas that CoreLogic predicts will decline is based on the rising mortgage rates. Home sellers will be forced to lower their prices in some areas. Also, on a year over year basis existing home sales and new home sales fell 20.2% and 29.6% respectively, representing the sharpest housing contraction since 2006.
But remember, the firm studied 392 housing markets, meaning the solid majority are still expected to see price growth.
If any readers are considering selling or buying a property, I’m happy to offer a free consultation concerning the market for your specific property and community.