Home Price Growth Slowing in Several Markets

Since the 2008 financial crisis, predicting where the housing market is headed next has become a game with very high stakes indeed. Tracking the interactions between home prices, affordability, the impact of regulation (or deregulation), and a thousand other factors all need to be considered. In an attempt to foresee where housing is headed in 2018, HouseCanary examined all 381 metropolitan statistical areas (MSAs) in the US in terms of local affordability (and change in affordability), housing market price growth, and the pace of housing market price growth. HouseCanary VP of Analytics Alex Villacorta broke that data down into a recent post entitled “5 Housing Trends That Are Changing The Market Today.”

“While we are still seeing a positive trend in growth on average,” says Villacorta in the report, “the explosive acceleration we’ve seen over the past few years is clearly softening, market by market.” Several markets that had been growing dramatically have been decelerating. Moreover, 10 of the 25 markets showing the most marked growth deceleration all happen to be in Florida.

What’s causing the deceleration? HouseCanary’s report cites several possible factors, including “an affordability crisis in many rapidly appreciating markets, waning home sales volume and prices in specific price segments, a likely increase to mortgage rates, implications of the recently passed tax law, and general uncertainty about the future.”

The 10 MSAs that have shown the strongest home price growth so far in 2018 versus 2017 include Scranton, Pennsylvania; Stamford, Connecticut; Hartford, Connecticut; Philadelphia, Pennsylvania; Harrisburg, Pennsylvania; Syracuse, New York; Norfolk, Virginia; New York, New York; Louisville, Kentucky; and Indianapolis, Indiana.

HouseCanary also found notable softening in the luxury segment of several markets, which the report says is “typical of mid-to-late cycle behavior where exceedingly high prices in most desirable areas drive buyers further out in search of relative affordability.”

The 10 MSA showing this “luxury lag” the strongest include Las Vegas-Henderson-Paradise, Nevada (-7 percent); Orlando-Kissimmee-Sanford, Florida (-7 percent); Palm Bay-Melbourne-Titusville, Florida (-7 percent); Tampa-St. Petersburg-Clearwater, Florida (-6 percent); Stockton-Lodi, California (-6 percent); Lakeland-Winter Haven, Florida (-6 percent); Miami-Ft. Lauderdale-West Palm Beach, Florida (-6 percent); Dallas-Fort Worth-Arlington, Texas (-6 percent); Deltona-Daytona Beach-Ormond Beach, Florida (-6 percent); and Jacksonville, Florida (-5 percent)

You can read HouseCanary’s full report by clicking here.

Source Article