13-Year High Reached In Home Price Growth In Spring 2022

Mortgage News June 2, 2023

According to a recent report from Redfin, the era of the housing market during the pandemic has led to a shift in home price-growth trends, making them more localized in the previous year than they have been since 2009.

In the spring of 2022, towards the end of the homebuying boom during the pandemic, there was a significant increase in metro-to-metro variations in home-price growth, reaching the highest level in 13 years. While the variation has decreased since then, price growth continues to fluctuate more than pre-pandemic levels, as the housing market rapidly cools down in certain areas of the country while remaining stable in others.

The housing market’s local nature is evident in the significant price-growth disparity between San Francisco and Miami. San Francisco experienced a 10.1% year-over-year decrease in home prices, while Miami saw a 10.9% increase, reaching a near-record high. This 21-percentage-point difference, one of the largest in over three decades, represents the largest gap among the major U.S. metros analyzed by Redfin.

The significant disparity in price growth between San Francisco and Miami highlights the contrasting homebuying dynamics in these regions. While some prospective buyers in the Bay Area, previously priced out, may now have an opportunity to enter the market, they face challenges such as elevated mortgage rates, high prices, and limited supply. On the other hand, many residents in South Florida are facing increasing difficulties in affording a home.

The decline in San Francisco home prices can be attributed to the increasing number of tech employees who have embraced remote work, resulting in a significant rise in domestic migration away from the Bay Area. This trend has been amplified by layoffs in the tech industry, declining tech stocks, high mortgage rates, and persistently high home prices. In contrast, Miami continues to experience price growth as it attracts remote workers seeking more affordable alternatives to expensive regions in the country.

Although the Bay Area remains significantly pricier than South Florida, the cost advantage of relocating from San Francisco to Miami has reduced. While San Francisco’s home prices have decreased and Miami’s have increased, the price gap has narrowed. In February, the median home-sale price in San Francisco remained 2.9 times higher than Miami’s ($1.42 million compared to $483,000), showing a decrease from being 4.4 times higher in February 2020.

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Need a list of investment advisors in your area? Contact Jennifer Swanson at 260-223-9203 or Jennifer@SpecialtyContactDatabases.com


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