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These Housing Markets Are Due Home Price Cuts Soon: Analysis

Despite National Woes, Bay Area Housing Prices Hit New Highs
(Photo : Justin Sullivan/Getty Images) SAN RAFAEL, CA - MAY 17: Real estate agents arrive at a brokers tour showing a house for sale with a list price of $1.3 million May 17, 2007 in San Rafael, California. The San Francisco Bay Area has seen the median price for existing single family homes surge 6.6% to $720,000 while the national median home price dropped 0.9% to $215,300 in March. Marin County led the Bay Area surge with the median home price reaching a record high of $1,010,000, the first county in the state of California to surpass the million dollar mark.

Home prices could soon dip in a handful of metro areas in the United States, according to a new analysis. 

Home prices in the US increased by 6.5% in March from a year earlier, per an S&P CoreLogic Case-Shiller Index. It is the sixth time the index has reached a new record high over the past year. 

On a monthly basis, national home prices rose by 1.3%. A separate CoreLogic HPI Forecast predicted home prices to increase by 0.8% from March 2024 to April 2024. 

While home prices in the Northeast continue to see a substantial increase in prices, some metro areas are forecasted to see price drops. 

Where Home Price Cuts Are Expected

The cities with the highest chance of seeing price cuts in the US are:

  • Palm Bay-Melbourne-Titusville, Florida
  • Atlanta-Sandy Springs-Roswell, Georgia
  • Spokane-Spokane Valley, Washington
  • Deltona-Daytona Beach-Ormond Beach, Florida
  • Greenville-Anderson-Mauldin, South Carolina

CoreLogic noted that each metro area listed has a "very high" risk for a price decline. This means they have more than a 70% chance of experiencing a price drop over the next 12 months. 

Where Home Prices Increase Significantly

In addition to analyzing where price cuts are most probable, CoreLogic also noted where housing prices have significantly increased. 

By state, year-over-year home prices increased the most in New Jersey (with a 12.2% gain), South Dakota (11.5%), and New Hampshire (10.6%). 

By metro areas, year-over-year home prices posted the highest gain in Miami (with a 10.6% increase), San Diego (9.4%), Chicago (8.2%), Boston (7.6%), Las Vegas (7.4%), Los Angeles (6.0%), Washington (6.0%), Phoenix (5.6%), Denver (2.8%), and Houston (2.1%).

"Home prices increased again this March beyond the typical seasonal uptick, despite mortgage rates reaching this year's high and the affordability crunch continuing to keep many prospective buyers on the sidelines," Dr. Selma Hepp, chief economist for CoreLogic, said in the report. "Even with the long-anticipated break in for-sale inventory, the surging cost of homeownership, further fueled by rising insurance and tax expenses, is holding potential home sales back, as is evident in the slow rise in sales compared with last year. These price pressures reflect the overall supply-and-demand mismatch, as well as continued interest from households with larger budgets."

READ MORE: Home Prices Soar To All-Time High in March as Housing Affordability Crisis Deepens


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