Home prices in the United States rose an average of 6.6% last year. That rate is simply unsustainable. While CoreLogic is predicting that home prices rise again in the next 12 months, that rise is expected to be 4.8%, or slower than last year. So, what about prices in Florida?
We are expecting home price increases to accelerate in Florida. Last year, Florida home prices rose an average of 5.6%. That was a pretty healthy growth rate. However, CoreLogic is now predicting a 7.2% increase in Florida home prices over the next year. At that growth rate, most homes in Florida will be worth more than they were at their peak!
So, should we buy the expected growth rate in Florida? From my perspective, the answer is, “it depends.” No, I am not waffling. It really does depend on location and base price of the home. Generally speaking, I believe you should expect to see the 7.2% home price growth (or more) if you are in Sarasota or Manatee, and your home is currently worth less than $600k. However, if you have a more expensive home in our area, I believe that the combination of softer demand, new federal tax law, and rising interest rates will keep home price growth below the 7.2% level. That said, I still expect home price growth for more expensive homes. It is just likely not to reach 7%.
At this point, I still think buyers at all price points are well advised to move sooner rather than later. There just isn’t much incentive to wait in our area.