FILE VIDEO: Florida cities facing ‘most overpriced rent’.
TAMPA, Fla. (WFLA) — North Port-Sarasota-Bradenton and Lakeland-Winter Haven may be among the top five metro areas where the housing market is cooling off the fastest.
According to a leading real estate data and analytics company, there could be a steep decline in home prices over the next year in four Florida markets that are “significantly” overvalued, including those two metro areas.
Based on an analysis of more than 40 years of data from public records and servicing and securities databases, including repeat-sales transaction data, CoreLogic ranked the top five markets in the United States that are at risk of home price decline. The evaluations are based on price, time between sales, property type, loan type and distressed sales.
According to the report, the following housing markets are the most at risk, with the Lakeland-Winter Haven and North Port-Sarasota-Bradenton metro areas ranked at No. 2 and 3 respectively.
- Provo-Orem, Utah
- Lakeland-Winter Haven
- North Port-Sarasota-Bradenton
- Cape Coral-Fort Myers
- Port St. Lucie.
The CoreLogic Home Price Index shows each city has above a 70% chance of a price decline over the next 12 months, giving each rating a 50% to 75% confidence score.
According to the report, home prices nationwide went up year over year by 1.4% in May 2023 compared with May 2022. Economists predict they will increase by 4.5% from May 2023 to May 2024.
The report notes that Northeastern states and Southeastern metro areas have continued to see larger home price gains compared to other parts of the U.S. as workers moved back to job centers in some areas and sought more affordable places to live.
When it comes to home price changes, Miami had the largest gain at 11.8% year over year. Maine, New Jersey and Indiana were the states with the highest increases year over year at 7.2%, 7.1% and 6.9% respectively.
“After peaking in the spring of 2022, annual home price deceleration continued in May. Despite slowing year-over-year price growth, the recent momentum in monthly price gains continues in the face of recent mortgage rates increases,” said Selma Hepp, Chief Economist for CoreLogic. “Nevertheless, following a cumulative increase of almost 4% in home prices between February and April of 2023, elevated mortgage rates and high home prices are putting pressure on potential buyers. These dynamics are cooling recent month-over-month home price growth, which began to taper and is returning to the pre-pandemic average, with a 0.9% increase from April to May.”