Have Home Values Hit Bottom? National and South Florida Trends

Whether you’re already a homeowner or you’re looking to become one, the recent headlines about home prices may leave you with more questions than answers. News storiesare talking about home prices falling, and that’s raising concerns about a repeat of what happened to prices in the crash in 2008.

One of the questions that’s on many minds, based on those headlines, is: how much will home prices decline? But what you may not realize is expert forecasters aren’t calling for a free fall in prices. In fact, if you look at the latest data, there’s a case to be made that the biggest portion of month-over-month price depreciation nationally may already be behind us – and even those numbers weren’t significant declines on the national level. Instead of how far will they drop, the question becomes: have home values hit bottom?

The chart below shows October Statistics, but I have seen a few other sources for November and December that have shown an increase in buyer demand and traffic, mortgage applications, and median prices have ticked up slightly since the chart below.  I will be updating this post or will link to another one that shows newer statistics. 

Let’s take a look at the latest data from several reputable industry sources (see chart below):

 

The chart above provides a look at the most recent reports from Case-Shiller, the Federal Housing Finance Agency (FHFA), Black Knight, and CoreLogic. It shows how, on a national scale, home values have changed month-over-month since January 2022. November and December numbers have yet to come out.

Let’s focus in on what the red numbers tell us. The red numbers are the change in home values over the last four months that have been published. And if we isolate the last four months, what the data shows is, in each case, home price depreciation peaked in August.

While that doesn’t guarantee home price depreciation has hit bottom, it confirms prices aren’t in a free fall, and it may be an early signal that the worst is already behind us. As the numbers for November and December are released, data will be able to further validate this national trend.

It’s important to remember that although prices have increased a lot through the beginning of 2022, the reasons for the slowdown are higher inflation and higher interest rates.  The lack of sellers willing to sell with their 3% interest rate loans have contributed to the low inventory.

 

South Florida Housing Trends

Boca Raton / Palm Beach County, St Lucie and Martin Counties have seen some decreases since the summer, fluctuating with increases,  but St Lucie county has seen an uptick in November.  New statistics for the state of Florida and the counties will be available on January 21st.

Here is a link to the most recent Florida Housing Market Update for November, 2022.

Bottom Line

Home prices month-over-month have depreciated for the past four months on record, but there’s a strong case to be made that the worst may be behind us. If you have questions about what’s happening with home prices in our local market, let’s connect.