Nationwide Home Prices Rise, Florida Stays Steady

SEATTLE — Home prices rose from a year earlier in all 50 of the most populous U.S. metropolitan areas in December—the first time that has occurred since May 2022, according to a new report from Redfin.

By comparison, home prices rose in 41 metros in December 2023.

“Places that have long been known as affordable places to live, like Cleveland and Milwaukee, are now seeing double-digit price increases—and that’s after home prices skyrocketed during the pandemic,” said Redfin Senior Economist Elijah de la Campa. “Affordable housing havens have become harder and harder to come by; even places that saw some price relief last year, like Texas and Florida, are now seeing prices tick back up. Many people looking to move this year will likely opt to rent because it’s the more affordable option and rental affordability is expected to improve as more supply comes on the market.”

Home prices soared during the pandemic as record-low mortgage rates fueled homebuyer demand and then fell in 2023 when rates climbed back up to a two-decade high. In April 2023, prices only rose in just 19 metros — the lowest number since 2012. But prices have recovered over the last year as buyers have grown accustomed to elevated mortgage rates. They’re also climbing because there’s a shortage of homes for sale.

Last month, home prices posted their biggest gain in nearly a year, jumping 6.3% year over year to a median $427,670.

Home prices are rising fastest in the Midwest, slowest in Florida

In Cleveland, the median home sale price rose 15% year over year in December—the biggest increase among the 50 most populous metros. Next came Milwaukee (14.5%), Philadelphia (14%), Miami (11.8%) and Chicago (11.1%).

“A lot of sellers have a very specific number in mind because they saw their neighbor sell for $40,000 over the asking price during the pandemic. They’re willing to walk away if they don’t get that number, which is one factor keeping prices high,” said Bonnie Phillips, a Redfin Premier real estate agent in Cleveland. “With affordability so strained, buyers are feeling empowered to ask for discounts, but they’re often getting shut down by sellers—even for small asks.”

Phillips continued: “Cleveland may still have a reputation as an affordable-housing haven among out-of-staters, but not so much among locals. Many families have been priced out, and those who can still afford to buy have to move to neighborhoods they don’t really want to live in. Their dream of owning a beautiful farmhouse on 1.5 acres has shifted to a reality of a small home in an urban area.”

In Tampa, FL, home prices rose just 0.5% year over year in December — the smallest increase among the top 50 metros. Next came Orlando (1.3%), Jacksonville (1.3%), Austin, TX (1.5%) and San Antonio (1.6%).

Up until December, it was common to see home prices fall in Florida and Texas. In November, for example, prices fell in two of the top 50 metros: Tampa (-1.3%) and Dallas (-0.6%). Texas and Florida have been building a lot of homes, which is limiting price growth. Buyer demand is also lackluster because many people have been priced out of the two pandemic homebuying hotspots.

Source: Redfin

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