Home price appreciation in February climbed 20% over the previous year, marking the 12th month of consecutive double-digit gains, according to figures released Tuesday by real estate analytics firm CoreLogic.
Although low inventory continues to drive up prices, CoreLogic’s forecast suggests home appreciation should finally hit its stride and slow down to about 5% in the coming year, according to a news release from the company.
CoreLogic’s Home Price Index and forecast also showed the largest home price appreciation was found in warm weather areas such as Florida’s Gulf Coast and Arizona – a logical result of the remote work boom caused by the pandemic.
Naples, Fla. had the highest year-over-year growth in the country, with an increase of 41% and “all four metro areas with the largest annual price gains in February are on Florida’s Gulf Coast,” according to CoreLogic. That also included Cape Coral, which saw a 40% increase, and statewide Florida took the top spot for growth at 29.1%.
Other warm weather states such as Arizona ranked a close second at the state level, with 28.6% growth, according to the data analytics firm. Nevada came in third with 25.8% annual appreciation.
Home prices also increased nationally by 20% year-over-year and were up 2.2% in February from January’s numbers.
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But CoreLogic expects those types of gains to slow and level out at about 5% in the next 12 months. A key shift will come in inventory levels, suggests Frank Nothaft, chief economist at CoreLogic.
”New listings have not kept up with the large number of families looking to buy, leading to homes selling quickly and often above list price,” Nothaft said. “This imbalance between an insufficient number of owners looking to sell relative to buyers searching for a home has led to the record appreciation of the past 12 months. Higher prices and mortgage rates erode buyer affordability and should dampen demand in coming months, leading to the moderation in price growth in our forecast.”
Colder locales already are facing an uphill battle with home appreciation, CoreLogic data suggests. Upstate New York had the lowest appreciation rates in the country, with Ithaca posting a 5.2% increase and Elmira with 3%, according to the news release.
