“Mansion Global” host Katrina Campins talks about the state of the housing market on “Making Money.”
U.S. home prices have risen relentlessly over the past three years, but a growing number of markets are at risk of a sharp correction.
new report According to a report released by real estate data and analytics company Parkl Labs, there are 15 housing markets in the United States that are “at risk” of experiencing a home price correction over the coming fall and winter.
“While there is no guarantee that home prices will fall significantly in these regional housing markets, there are signs of softening,” the report said. “At the very least, buyers in these markets are in a better position than they were a few years ago.”
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Homes for sale in the Aqualane Shores neighborhood of Naples, Florida on Tuesday, February 13, 2024. (Photographer: Lizette Morales McCabe/Bloomberg via Getty Images/Getty Images)
According to Parcl Labs, these are the 15 markets most at risk of a correction.
- Crestview-Fort Walton Beach-Destin, FL
- Daphne Fairhope Foley, Alabama
- Florida: Deltona – Daytona Beach – Ormond Beach
- Gainesville, Florida
- Homosassa Springs, Florida
- Lakeland-Winter Haven, Florida
- Miami, Fort Lauderdale, Pompano Beach, Florida
- Myrtle Beach-Conway-North Myrtle Beach, South Carolina
- Naples Marco Island, Florida
- Ocala, Florida
- Florida Orlando Kissimmee Sanford
- Palm Bay-Melbourne-Titusville, Florida
- Port St. Lucie, Florida
- Sebastian Vero Beach, Florida
- Tampa, St. Petersburg, Clearwater, Florida
What’s most notable about this list is that 13 of the 15 “at risk” housing markets are all in Florida.
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Florida’s housing inventory has been growing at an “accelerating rate” over the past year. Some of the increase is due to Hurricane Ian, which made landfall on Florida’s Gulf Coast in September 2022 and exacerbated the housing supply shortage, but was ultimately offset by new listings.
A waterfront home near Naples Pier on Tuesday, Feb. 13, 2024, in Naples, Florida. (Photographer: Lizette Morales McCabe/Bloomberg via Getty Images/Getty Images)
Florida is also struggling with rising home insurance costs, and rising home prices are exacerbating home affordability concerns. Rising insurance premiums Several issues have come up, including weather disasters, rising reinsurance rates and rising home repair costs due to inflation-induced increases in the cost of building materials. In addition, more and more insurers are either withdrawing from the state of Florida or raising their rates.
Eventually, a new state law was passed. The collapse of Surfside Condominiums This 2021 law puts “downward pressure” on many older condominiums along the Florida coast. The law requires inspections of all condominiums and apartment buildings over three stories. If the structure is found to be in poor condition, a preliminary structural integrity study must be completed.
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“Weakening prices, especially in strong markets like Tampa and Miami, could signal the early stages of a market correction in the region,” said Jason Lewis, co-founder of Parkle Labs.
There are a variety of driving forces behind the nationwide rise in home prices.
Years of under-construction created a nationwide housing shortage, a problem that was then exacerbated by soaring mortgage rates and the cost of construction materials.
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Rising mortgage rates over the past three years have created a “golden handcuff” effect on the housing market: Sellers who locked in record-low mortgage rates of less than 3% when the pandemic began are becoming reluctant to sell, further restricting supply and leaving eager would-be buyers with few options.
Economists predict mortgage rates will remain high for most of 2024, then Federal Reserve Even if they start cutting rates, they are unlikely to return to the lows seen during the pandemic.
