This is the 3rd in a series of articles I've posted from Fortune reporting on CoreLogics outlook on where home prices are headed.
In previous articles, which started in March, CoreLogic was not overly concerned about where home prices were headed as they identified just 13 markets, out of 385, that had a high to very high risk of declining prices. In May that number jumped to 70 markets and now in November, with 354 markets in high or very high risk territory, it's a whole new ballgame.
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Here's Fortune's summation of CoreLogic's November findings
The November assessment finds 354 markets have a greater than 50% chance of notching a negative year-over-year reading (i.e. markets in either the "high" or "very high" risk groups) over the next 12 months. That's up from 335 markets in October that had a greater than 50% chance of falling home prices. In August, there were 125 markets at risk. In July, there were 98 markets at risk. In June, 45 markets were at risk. And in May, just 26 markets (see chart above) fell into those "high" or "very high" risk camps.
Read all about it
Where are home prices are headed in 2023—this map shows CoreLogic’s revised outlook for 392 housing markets
Powell is right: Not only does housing activity continue to plummet, but U.S. home prices are falling for the first-time since 2012.
Unlike the 2000s housing correction, which saw U.S. home prices fall 27% between 2006 and 2012, this ongoing housing correction isn’t underpinned by bad loans nor by a supply glut. Instead, this correction is driven by what Fortune calls “pressurized affordability.” The Pandemic Housing Boom‘s 43% run-up in U.S. home prices combined with spiking mortgage rates has simply pushed affordability beyond what many borrowers can stomach.
The only levers available to depressurize affordability are for either mortgage rates or home prices to fall. In recent months, we’ve seen the latter.
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Here in the Catalina Foothills sold prices are up or down depending on the time period being compared
MSP = Median Sold Prices
MSP's this year
Feb/Mar 2022 - $765,000
Apr/May 2022 - $780,000 +2%
Jun/Jul 2022 - $825,000 +5.76%
Aug/Sep 2022 - $765,000 -7.27%
Oct/Nov 2022 - $780,000 +1.96%
Comparing median sold prices from their high point in Jun/Jul to now, Oct/Nov, shows a -5.4% price drop.
While CoreLogic notes the following regarding price drops from their high point.
Nationally, home prices are down 1.3% from their 2022 peak. At least that’s according to the lagged Case-Shiller reading through August. However, markets like Austin and Reno are down 10.2% and 8.4%, respectively, while markets like Des Moines and Baltimore remain at their all-time highs. (Here’s the shift in the nation’s 400 biggest markets.)
Bimonthly prices this year V. last year
Feb/Mar 2021 - $661,000
Feb/Mar 2022 - $765,000 +15.7%
Apr/May 2021 - $700,000
Apr/May 2022 - $780,000 +11.4%
Jun/Jul 2021 - $715,000
Jun/Jul 2022 - $825,000 +15%
Aug/Sept 2021 - $680,500
Aug/Sept 2022 - $765,000 +12+%
Oct/Nov 2021 - $695,000
Oct/Nov 2022 - $780,000 +12+%
While sold prices have slid a bit in recent months, when compared to last year sold prices are solidly UP this year over last year. they're UP somewhere between 11% - 15% over last year.
Where we go from here is unknown. And I agree with the statements expressed in the article;
The Pandemic Housing Boom‘s 43% run-up in U.S. home prices combined with spiking mortgage rates has simply pushed affordability beyond what many borrowers can stomach.
and there are just two options, either home prices or mortgage rates must fall. What else is there?
John Schneider /Realtor®
Tierra Antigua Realty
Catalina Foothills Homes
[email protected]
520 271-4164
see TheFoothillsToday.com
to see all the homes for sale in the Catalina Foothills
(and only in the Catalina Foothills)
