Marking a shift in the dynamics of the real estate landscape, according to CoreLogic’s November 2023 home price index.
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The data revealed a notable 5.2% year-over-year surge in housing prices, the most robust annual growth rate since January 2023. This significant uptick in prices propelled Detroit to the forefront of markets experiencing home appreciation, dethroning Miami from its previous position.
CoreLogic, a financial services company, releases its home price index monthly, utilizing public record data and various real estate databases. The index, drawing from over 45 years of repeat sales transactions, serves as a reliable metric for analyzing home price trends. While there is a five-week lag in the release of data, it is considered a gold standard alongside the Case-Shiller index, which focuses on 20 cities nationwide.
Despite the rise in mortgage rates, which began to decrease in late 2023 and currently stand at 6.74%, home price appreciation continued its upward trajectory in November. Selma Hepp, CoreLogic’s chief economist, noted that the annual growth reflected comparisons with the previous year’s declines, with seasonal gains remaining consistent with historical averages.
The winners and losers of the November 2023 housing market were discerned from the data. The Northeast, Southern, and Midwest markets experienced the most substantial increases, driven by relative affordability. Detroit led the pack with an impressive 8.7% year-over-year gain, displacing Miami from its 16-month stint as the highest-appreciating city. Miami secured the second spot with an 8.3% increase, followed by Charlotte, North Carolina, at 7.4%.
The surge in demand for homes in warmer-weather locations, particularly Florida, intensified during the pandemic, attracting over 655,000 new residents to the state. Florida’s housing values reached new heights, making it the second-most valuable real estate market in the U.S. by September 2023, according to Zillow. However, the rise in home prices in Florida and other markets contradicts expectations of a decline with increasing mortgage rates, as demand in these relatively affordable markets persists.
CoreLogic attributed the strength in home values to job gains facilitated by the Inflation Reduction Act and the CHIPs Act, which stimulated housing demand. On the other hand, markets in the Mountain West and Northwest, already relatively more expensive with lower demand, experienced price increases but not at the same rate as the winners of November 2023. CoreLogic identified Denver, Las Vegas, and San Diego as overvalued markets.
Looking ahead to 2024, CoreLogic’s forecast anticipates a slowdown in U.S. home price gains to 2.5% in November. However, despite Miami’s substantial gains in November 2023, certain Florida markets are flagged as majorly overvalued, with the possibility of declines in 2024. CoreLogic identified five metropolitan areas, four of which are in Florida, as having a “very high” level of risk of price decline in the next 12 months.
The next CoreLogic reading, featuring December 2023 data, is scheduled for release on February 6.
This story was originally featured on Fortune.com
