MARKET & TRENDS: MARKET CORRECTIONS
SYRACUSE, NY
Prime Suspects for Correction A RECKONING IN HOME PRICES IS COMING. INGO WINZER
A
lthough the home price bubble is still percolating in some places, with
HOME PRICE INCREASE 3 YEARS
POPULATION GROWTH 3 YEARS
PRIME SUSPECTS
43%
SYRACUSE, NY
-0.7%
the average sales price up 5% in the third quarter compared to last year (up 11% in Miami!), the slowing U.S. economy almost ensures there will be a reckoning in 2024. Home prices everywhere are well above the level that local incomes can support, so prices will have to realign themselves everywhere. How fast that process takes will differ from market to market. In some markets, there will be a sharp correction over a couple of years; in others, the process will play out much longer. (In the 1980s, after a boom, home prices in New York stayed flat for 10 years.) In some markets, mainly in Florida, strong demand for properties may keep prices high for a longer period, but in others it's difficult to see why prices shot up in the first place. These are the prime suspects for a significant correction in the next year. The accompanying table shows 12 markets where home prices jumped almost 50% over the past three years, while the local
41%
MILWAUKEE, WI
-0.7%
45%
SAN DIEGO, CA
-0.6%
60%
FORT LAUDERDALE, FL
-0.3%
42%
DAYTON, OH
0.0%
43%
WORCESTER, MA
0.3%
46%
PROVIDENCE, RI
0.3%
44%
CINCINNATI, OH
0.4%
46%
NEW HAVEN, CT
0.5%
41%
WICHITA, KS
0.5%
54%
CAMDEN, NJ
0.6%
52%
GREENSBORO, NC
1.0% LOCAL MARKET MONITOR, CARY NC, a Vertical IQ Product
Ingo Winzer is president of Local Market Monitor. The company’s Investors Metro Analysis shows the opportunity and risk in 200 local real estate markets at www.LocalMarketMonitor.com,
population either stagnated or actually decreased. That probably happened with a very small number of sales, but thin markets can fall as sharply as they rise. If you were thinking of selling a property in these markets, ”immediately” would be the best time to do it. •
including strategic analysis of all local ZIP Codes. Winzer has analyzed real estate markets for more than 30 years, and his views on real estate markets are often quoted in the national press. Previously, Winzer was a founder and executive vice president of First Research, an industry research company acquired by Dun & Bradstreet in 2007. Winzer is a graduate of the Massachusetts Institute of Technology and holds a master’s degree in finance from Boston University.
12 | think realty magazine :: january – february 2024
Made with FlippingBook Online newsletter