5 housing markets where prices are most likely to fall over the next year, including Miami
- A recent report by CoreLogic found that national home prices saw a 5.5% year-over-year increase in July.
- However, with an expected growth in unemployment, CoreLogic expects growth to slow down drastically by July 2021.
- In the report, CoreLogic breaks down the five metro areas that are most likely to see house prices fall over the next year, and by how much.
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Markets across the country are heating up as the demand for affordable homes soars and supply falls, resulting in a competitive climate and rising prices.
Over the past several months, real estate has seen suburban, and suburban-like, markets heat up as prospective homeowners seek larger spaces and cheaper prices. Paired with historically low mortgage rates and low inventory, that has made buying a home more competitive than ever in some places.
A recent report by CoreLogic, called Home Price Insights, found that national home prices in July saw a 5.5% year-over-year increase, the fastest growth rate since August 2018. As CoreLogic explained, the recipe for July's growth includes low inventory, strong purchase demand, and historically low mortgage rates, which fell below 3% for the first time ever.
But the stark increases are expected to simmer. By July 2021, CoreLogic predicts that national home prices will only go up another 0.6% year-over-year.
CoreLogic named five metro areas most likely to see a decline in home prices over the next year: Las Vegas, Nevada; Prescott, Arizona; Lake Charles, Louisiana; Miami, Florida; and Huntington, West Virginia.
CoreLogic's chief economist, Dr. Frank Nothaft, explained to Business Insider that these markets showcase "elevated unemployment and/or home prices that are high relative to income of local residents."
Looking at Miami and Las Vegas, Nothaft pointed out the high level of employment in the hospitality, travel, entertainment, and food service industries, all drastically impacted by the pandemic. As for Lake Charles and Huntington, Nothaft said they have seen a substantial amount of job loss in energy-related fields.
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