Home Price Declines Likely In Hurricane Prone Tampa and Palm Beach
Home research firm CoreLogic issues a monthly report about national housing. It also looks at data by state and city. The most recent study is the January edition. Their findings include a list of metros where home prices are most likely to decline. Their list of five includes Palm Beach and Tampa, two cities at risk for major hurricanes that have been damaged by hurricanes in the last decade.
A look at other cities: San Francisco Could Get Flooded
In November 2023, home prices increased nationwide by 5.5% compared to November 2022. CoreLogic forecasts that this upward trend will continue, although not as quickly. Its experts expect home prices nationwide to rise 2.5% from November 2023 to November 2024. Dr. Selma Hepp, Chief Economist for CoreLogic, was surprised to see the current price strength during this period of high mortgage rates.
November 2024 Forecast
From November 2023 to November 2024, home prices will rise most in the northwest, the CoreLogic forecasts show. Among states, Rhode Island is expected to post an increase of 11.6%, followed by Connecticut at 10.6%.
The CoreLogic Market Risk Indicator (MRI) is also posted every month. It shows which metros have a “very high” risk of declining home prices over the next 12 months. “Very high” means a 70% probability of a price decline.
Four of the five metros with a “very high” risk of decline are in Florida. The fifth is Atlanta. Those in Florida–Palm Beach, Tampa, Palm Bay, and Daytona Beach are on the Gulf of Mexico or the Atlantic Ocean. Each has had an increase in home prices since the start of the COVID-19 pandemic, as tens of thousands of people relocated to Florida.
According to a study from First Street, which forecasts the odds of hurricane-force winds by location between now and 2053, $7 out of $10 in infrastructure damage will be in Florida. The twenty cities most likely to have a major hurricane are all in Florida.
Is the reason real estate prices will likely drop in four Florida cities because they are overpriced, or is it because of the risk of catastrophic damage? Residents of these cities will know soon enough.
