LAKELAND, Fla. — While home prices across the United States continued to rise in the CoreLogic Home Price Index, the team behind the numbers said warning signs may be flashing for several areas in Florida.
Month-over-month, home prices increased 0.9% nationally and 1.4% year-over-year, CoreLogic reported. The company forecasted a 1% month-over-month gain in May 2024 and a 4.5% gain in prices year-over-year in the same month.
The Southeastern United States continued to pace the nation with gains, with Miami posting the largest gain with an increase of 11.8% in home prices.
But CoreLogic said while Miami's market has soared, other areas of Florida may be ready for a reset.
After looking for a year, Tonya Fielder finally closed on a home near Winter Haven on June 30. She said surprisingly the homes there were cheaper than in Haines City where she initially wanted to live.
“It was about a $30,000 difference. It was the same builder, same home but it was a higher price in Haines City,” Fielder said.
CoreLogic listed five metro areas "at risk of a home price decline" over the next 12 months. The impacted Florida metro areas include Lakeland-Winter Haven, North Port-Sarasota-Bradenton, Cape Coral-Fort Myers and Port St. Lucie.
Lakeland-Winter Haven is second on the list. According to experts it has a lot to do with cumulative appreciation in home prices.
“Since the onset of the pandemic many areas have seen home prices grow [in Florida] as much as 70% in total over the last three years. Nationally we only saw about 40% increase in home prices,” said Selma Hepp, Chief Economist for CoreLogic. “So in these markets in Florida, that’s almost double the national appreciation. So that introduces some vulnerability to metro areas to future changes in home prices.”
The report suggests the Lakeland-Winter Haven, housing market has a more than 70% probability of a decline, but Hepp said sellers should not panic.
“One should not necessarily be concerned about the probability right now unless they’re going to sell over the next six months. Even in that case it’s not certain that home prices are going to decline. It’s just that the market is in a very risky situation,” Hepp said.
Despite signs that home prices could dip, high interest rates could sideline many aspiring homeowners.
“With the prices going down we’re still looking at higher interest rates which means your monthly expenses are still going to be like you’re at a larger purchase price,” said Cynthia Givens, Broker/Owner of Heart of Florida Real Estate.
Givens advises buyers to have all their ducks in a row in advance, to be in a better position to find their dream home.
“Have a reputable lender pull your credit, look at your income to give you a real number so you are realistic with your buying power, and it makes the process so much easier,” Givens said.
According to CoreLogic, the metro area with the highest risk of a home price decline was Provo-Orem, Utah.
