Key Highlights
- Pending sales suggest activity to exceed last year levels
- Home price growth expected to be positive but slow over 2021
- 40 metro areas expected to see price declines over 2021
Once the housing market thawed after nation-wide shutdowns due to the COVID pandemic, home sales during the summer exceeded last year’s levels and, in fact, averaged +10% higher compared to September 2019. Based upon current pending sales, this positive trend is expected to continue into and through 2021.
CoreLogic’s Home Price Index Forecast is looking at the combination of strong demand and low inventory to help ensure that home price growth will continue in 2021 BUT at a much slower gain rate of +5.9% reported in August.
As CoreLogic’s Pending Home Price Index found annual price growth continuing to accelerate in October at the fastest pace in more than two years, annual price growth increased in all but two cities, Detroit and San Francisco. Phoenix and Seattle led the pack of 20 urban markets analyzed by CoreLogic with annual price growth accelerating at some +10%.
CoreLogic is, however, waving some red flags in its most recent Market Risk Indicators report. Looking at data points such as state and metro level unemployment rates, income, distressed loans, new constructions and others, CoreLogic is seeing a 65% or higher probability reading of lower home prices in 40 out of 392 metro areas in August 2021 compared to today’s home prices.
Included in this list of 40 metro areas with a high risk of probable home price decreases are metros located primarily in the Northeast, West and South. Florida and Michigan are each home to 6 metro areas with elevated risk. Nevada, with the highest unemployment rate in the country currently, Texas and New Jersey have 3 metros each at a high probable risk of home price declines.
Thanks to CoreLogic.
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