Home prices in the U.S. rose 7.3 percent in 2012 and are projected to rise 3.9 percent annually for the next five years, according to the latest CoreLogic analysis.
Florida cities, however, vary from the nation and even each other in 2012 home values, as well as CoreLogic’s projections for the future. Prices rose during 2012 in all six Florida cities tracked by the index, varying from a low of 3.5 percent in Jacksonville to a high of 13.5 percent in Miami. However, the company predicts a slight price decline in five cities by the close of 2013. It predicts only Tampa will see an increase this year, with prices rising 3.9 percent.
As 2013 continues, CoreLogic predicts, “market dynamic shifts” in bubble/crash metro areas. The company points out that homes are still undervalued in bubble cities, including some in Florida, but it predicts that investor demand for foreclosed properties will decline.
In addition, today’s rising prices will, over time, make a home purchase less affordable for some families, and “other demand factors that have driven recent double-digit price gains are unlikely to persist throughout the year.”
CoreLogic also thinks higher home sale prices will draw more sellers into the market, particularly those who recently emerged from being underwater. That higher inventory of for-sale homes coupled with lower investor demand will, according to CoreLogic, moderate price increases in 2013.
“Home prices were up in seven out of every 10 metro areas (nationally) in 2012,” say Dr. David Stiff, chief economist for CoreLogic Case-Shiller. “In 2011, prices appreciated in fewer than one-in-five markets.”
Stiff isn’t worried about another housing bubble, however.
“Even if double-digit price appreciation were to continue in the former bubble metro areas, there is no reason to believe that new home price bubbles are forming,” he says. “That’s because single-family homes in these markets are still very affordable, even after last year’s large price gain.”
He does expect some price volatility, however, as the market adapts to changing conditions. Nationally, CoreLogic forecasts a 2.5 percent price increase in 2013.
The CoreLogic analysis offered three price points for six Florida cities – the price increase or decrease over three years at the end of 2012; the price increase or decrease in 2012; and the forecasted price increase or decrease in 2013. They include:
Fort Lauderdale: A 3% price increase in the three years prior to Dec. 31, 2012; a 9.6% rise in 2012.
Jacksonville: A 10.2% price decline in the three years prior to Dec. 31, 2012; a 3.5% rise in 2012.
Miami: A 7.2% price increase in the three years prior to Dec. 31, 2012; a 13.5% rise in 2012.
Orlando: A 1.1% price decline in the three years prior to Dec. 31, 2012; a 9.5% rise in 2012.
Tampa: A 3.3% price decline in the three years prior to Dec. 31, 2012; a 7.1% rise in 2012.
West Palm Beach: A 1.5% price decline in the three years prior to Dec. 31, 2012; a 9.8% rise in 2012.
© 2013 Florida Realtors®
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