HOUSTON – (By Dale King, Realty News Report) – Prices of homes in most US communities continue to increase, despite the impact of some seriously negative headwinds in the real estate marketplace.
But price spirals that once soared skyward at double-digit rates have settled down – and may drop even further as spring approaches, says the CoreLogic Home Price Index and HPI Forecast for November 2022 which was released just this week.
The HPI says that while home prices continued to increase into last November, the gain for 2022’s next-to-the-last-month dropped to single digits, registering only an 8.6 percent gain — “the lowest rate of appreciation in exactly two years,” says CoreLogic.
Its report says the year-over-year increase for the Houston-The Woodlands-Sugar Land metro just missed the single-digit ranking. Growth registered 10.6 percent year-over-year last November in the Bayou City, a market CoreLogic still considers “overvalued.”
That’s not such a bad assessment. Places like Boston, with a November 2022 year-over-year growth rate of 5.8 percent; metro Chicago, 6.7 percent; Las Vegas, 7.7 percent and Los Angeles, 4.6 percent, are also considered “overvalued.”
CoreLogic, a global property information, analytics and data-enabled solutions provider, says November of 2022 was the 130th consecutive month of home price appreciation. But the firm added: “[We] expect annual price changes to move into negative territory by the spring of 2023 before rebounding to about 2 to 3 percent in the fall.”
“Although 16 states bucked the national trend and saw [a continuation of] annual double-digit increases, appreciation is decelerating in many popular housing markets across the country,” the report goes on.
“Southeastern states still led the country for price growth in November, but also saw some of the most pronounced cooling. Similarly, relatively more expensive Western areas also posted substantial combined declines in recent months since spring’s peak.
The report offered several key takeaways:
- U.S. home prices (including distressed sales) increased 8.6 percent year-over-year in November 2022 compared to November 2021. On a month-over-month basis, home prices declined by 0.2 percent compared to October 2022.
- In November, annual appreciation of attached properties (8.8 percent) was 0.3 percentage points higher than that of detached properties (8.5 percent).
- Annual home price gains are forecast to slow to 2.8 percent by November 2023.
- Miami posted the highest year-over-year home price increase of the country’s 20 largest metro areas in November, at 21.3 percent while Tampa retained the No. 2 spot at 17.3 percent.
- Florida and South Carolina recorded the highest annual home price gains, 18 percent and 13.9 percent, respectively. Georgia posted the third-highest growth, with a 13.6 percent year-over-year increase. Washington, D.C. ranked last for appreciation at 1.2 percent.
Nationwide, the recent price deceleration pushed November home values 2.5 percent below the spring 2022 peak. In 2023, home values will likely move even further from that high point, as CoreLogic expects price growth to begin recording negative year-over-year readings in the second quarter.
Looking ahead into 2023, CoreLogic predicts that annual home price growth will continue to slow throughout the year. Despite the current level of low consumer confidence in both the housing market and the economy, Selma Hepp, executive, deputy chief economist at CoreLogic, believes the housing market will show more resilience in 2023 as affordability continues to slowly improve.
“Although home price growth has been slowing rapidly and will continue to do so in 2023, strong gains in the first half of last year suggest that total 2022 appreciation was only slightly lower than that recorded in 2021,” said Hepp.
“However, 2023 will present its own challenges, as consumers remain wary of both the housing market and the overall economic outlook.”
“And while the recent decline in mortgage rates may bode well for the housing market,” Hepp added, “potential homebuyers are grappling with the idea of buying amid possible further price declines and a continued inventory shortage.”
The Houston market suffered a slowdown in November. The Houston Association of Realtors reported 5,827 single-family homes sold in November 2022, down 30 percent from 8,374 sales in November 2021.
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