MARKET & TRENDS
PRICING TRENDS
East Meets West WILL PRICES LEVEL OFF THIS YEAR?
By Ingo Winzer
ata from the FHFA show the average home price in the
But will they come down after that? And if so, how soon? I think the answers are “yes” and “very soon,” because that’s already happening in some major markets. Although the pandemic created special conditions under which prices began to soar, the underlying
force that pushed them higher is the flow of population. As that flow ebbs, the justification for super-high prices dissipates and markets will slowly (in real estate, price adjustments always happen slowly) return to the typical balance between prices and income. Our table shows that the West leads the way in this readjustment process, largely because the pres- sure of population flow happened there first. The flow toward the South was more recent, but that just delays the process. Note that the lower prices in the Western markets are not the result of any economic slowdown; recent job growth in these markets pretty much matches that of the Eastern markets. Strong population and job growth still provide support for home prices, but not at the current super-high levels. The readjustment process will take a while, but the Western markets make clear that it’s already started. •
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second quarter was up 5% from last year. Prices were up 8% in the first quarter and 12% in the fourth quarter of 2022, so there’s a definite slowing trend, and we can expect prices to level off this year.
Job Growth
Home Price Change
2023 Q2
2022
2023 Q2
6%
2.4%
23%
Atlanta, GA
7%
3.9%
Charlotte, NC
24%
3.5%
Indianapolis, IN
7%
18%
5.7%
Charleston, SC
9%
23%
4.0%
Tampa, FL
6%
28%
4.0%
Miami, FL
12%
25%
2.3%
Los Angeles, CA
0%
15%
Ingo Winzer is president of Local Market Monitor. The company’s Investors Metro
3.2%
Seattle, WA
-3%
13%
Analysis shows the opportunity and risk in 200 local real estate markets at www.LocalMarketMonitor.com, 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 and Bradstreet in 2007. Winzer is a graduate of the Massachusetts Institute of Technology and holds a master’s degree in finance from Boston University.
2.1%
Phoenix, AZ
-3%
22%
3.7%
Salt Lake City, UT
-3%
15%
4.0%
Boise, ID
-6%
10%
3.8%
Austin, TX
-8%
17%
LOCAL MARKET MONITOR, CARY NC
20 | think realty magazine :: november – december 2023
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