Home prices have been increasing in the United States over the past years, but several housing markets could see a steep price correction soon.
At least 15 housing markets in the country are "at risk" of a home-price correction in the fall and winter months. That is according to a recent report from real-estate data and analytics firm Parcl Labs.
For the report, the firm analyzed data from 1,000 housing markets in the US, where supply and demand are starting to diverge, which means there is more supply and less demand. The analysis also focused on housing markets with "signs of stress," which is typically evidenced by price cuts. To further refine the list, the analysis examined "high-flying markets that have yet to give up significant price gains but have given back less than 5% of appreciation."
"While there's no guarantee that these regional markets will experience a material home price correction, they are showing signs of softening. At the very least, buyers in these markets have more leverage than they did a few years ago," the report noted.
Which Housing Markets Have the Highest Correction Risk?
Florida led the pack, with 13 out of 15 housing markets with the highest correction risk found in the state. This is due to a rising active inventory in the state and a softening demand caused by a spike in home insurance premiums.
"These real-time insights suggest that the subtle "cracks" identified earlier in our analysis may be widening. The consistency of downward trends across multiple Florida markets indicates that previously observed supply-demand imbalances and increased price cuts are now translating into actual price declines. This emerging weakness in prices, particularly in high-performing markets like Tampa and Miami, could signal the early stages of a market correction in the region," Jason Lewris, co-founder of Parcl Labs, said in a statement.
Here are the 15 markets with the highest price correction risk, according to the analysis.
1. Crestview-Fort Walton Beach-Destin, FL
2. Daphne-Fairhope-Foley, AL
3. Deltona-Daytona Beach-Ormond Beach, FL
4. Gainesville, FL
5. Homosassa Springs, FL
6. Lakeland-Winter Haven, FL
7. Miami-Fort Lauderdale-Pompano Beach, FL
8. Myrtle Beach-Conway-North Myrtle Beach, SC
9. Naples-Marco Island, FL
10. Ocala, FL
11. Orlando-Kissimmee-Sanford, FL
12. Palm Bay-Melbourne-Titusville, FL
13. Port St. Lucie, FL
14. Sebastian-Vero Beach, FL
15. Tampa-St. Petersburg-Clearwater, FL
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