Housing Dodges Price Declines in Many Cities
BOCA RATON, Fla. – (By Dale King, Realty News Report) – The anticipated “correction” that would have either slowed, stopped or reversed the increase in home prices nationwide didn’t happen in nearly two-thirds of the 100 largest real estate markets in the nation, according to researchers at two South Florida universities.
But the major metros in Texas show a drop – albeit slight in some cases – using the same figures listed in the latest study released by researchers at Florida Atlantic University in Boca Raton and Florida International University in Miami.
Between September and the end of October in 2022, the analysts said, the average home price increased in 64 of the 100 largest housing markets — including Chicago, Memphis, Philadelphia and San Jose, Calif.
But home prices in Austin, one of the big surge cities in recent years – have been declining since the spring.
Austin didn’t have a lock on price declines. “Prices are falling in 36 metros, including Boston, Denver, Las Vegas, Phoenix and Pittsburgh,” said the study.
Still, the professors stated, price tags on residential properties in all 100 metros continue to come in above traditionally anticipated levels. At the low end, that difference, in some cases, is down to single digits.
In Austin, the study says, the average price of a home at the end of October was $549,232, which is 51.07 percent higher than the expected, historical price of a dwelling. The October number is down from $555,527 in September, $562,905 in August, $575,370 in July, $584,226 in June and $587,791 in May, when the price point for the year peaked.
Dallas was a little rockier for that same period. The average price in October was $389,737; for September, $389,607; for August, $391,300; for July, $392,235; for June, $390,056 and $382,587 for May. The October figure is still 48.04 percent higher than what historical calculations would anticipate.
Prices in Houston changed little during the third quarter of the year, say the professors’ statistics. Track back to December of 2019 and the space between actual and anticipated price was just under a single point — .96 percent, said the professors.
Looking at other Texas metros, the price of a home in San Antonio remains 31.37 percent above what the expected price should be. In El Paso, the premium is 28.46 percent and in McAllen, 24.26 percent.
Ken H. Johnson, Ph.D., a real estate economist in FAU’s College of Business and Eli Beracha, Ph.D., of FIU’s Hollo School of Real Estate, analyze long-term pricing trends back to 1996 in 100 markets to determine the most overvalued areas. The data covers single-family homes, townhomes, condominiums and co-ops.
Right now, Cape Coral-Fort Myers is the nation’s most overvalued market, they said, with buyers paying 67.48 percent more than they should, based on the market’s pricing history. Four other Florida markets are also in the top 10, along with Atlanta, Charlotte, Las Vegas, Ogden, Utah and Boise, Idaho.
“Limited supply and strong demand continue to slowly push prices up in most of the country,” Beracha said. “However, there are many signs that we are nearing the peak of the current housing cycle in most metros. We are just not there yet.”
Johnson and Beracha say a better understanding of where a particular market is in its current housing cycle leads to more-informed decision-making on whether to buy or rent.
Most other housing studies analyze median home prices, but that can be misleading, they said, because the median only identifies the halfway point in all sales prices (half the homes sold for more and half for less) and does not control for varying property characteristics, Johnson said.
A recent report from the Houston Association of Realtors said the average price of a single-family home rose 5.8 percent in November to $403,589 –well below the record high of $438,301 reached in May of this year. Houston’s median price increased 7 percent to $332,000, which is also below the highest median of all time, $354,000, which was achieved in June 2022.
Houston home sales declined 30 percent in November, one of the steepest dives in Texas real estate history. The Houston Association of Realtors reported 5,827 single-family homes sold in November 2022, down from 8,374 sales in November 2021.
Dec. 23, 2022 Realty News Report Copyright 2022.
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