Home prices continue to accelerate in Southwest Florida, but at a slower pace than the state and the nation.
Sarasota-Manatee home prices gained 3.6% over the year in July, trailing the increases of 4.8% in Florida and 5.5% throughout the U.S.,
The two-county region ranked 130th lowest for price growth among the 403 U.S. metros studied. But the increase topped the 2.8% annual gain posted in June.
Home prices have shown resilience during the coronavirus pandemic, even though some expected price gains to slow as the economy ground to a halt. CoreLogic had earlier projected that the Sarasota-Manatee region faced a 90% chance of falling prices over the next year.
But July's gains nationwide marked the fastest rate in nearly two years. CoreLogic credited the one-two punch of strong purchase demand — bolstered by falling mortgage rates, which dipped below 3% for the first time ever in July — and further constriction of for-sale inventory has driven upward pressure on home price appreciation.
"On an aggregated level, the housing economy remains rock solid despite the shock and awe of the pandemic," said Frank Martell, president/CEO at CoreLogic. "A long period of record-low mortgage rates has opened the flood gates for a refinancing boom that is likely to last for several years. In addition, after a momentary COVID-19-induced blip, purchase demand has picked up, driven by low rates and enthusiastic millennial and investor buyers.
"Spurred on by strong demand and record-low mortgage rates, we expect to see more homebuilding in 2021 and beyond, which should help support a healthy housing market for years to come," he said.
Sarasota-Manatee home prices are still climbing back from the Great Recession, off 9.8% from their pre-bubble peaks.
An earlier report from Florida Realtors found existing single-family homes in Sarasota-Manatee sold for a median $340,000 in July, up 11.5% over the year. Condos traded for $235,500, up 12.1%.
Home prices nationwide are now forecast to increase 0.6% over the next 12 months, a slowing rate but still more optimistic than two months ago, when CoreLogic expected U.S. prices to fall by 6.4%. Parts of the country hardest hit by the pandemic could see home price declines in the coming year. Higher unemployment could lead to an increase of distressed-sale inventory as continued financial pressures leave some homeowners unable to make mortgage payments, especially as government-ordered forbearance periods end.
"Lower-priced homes are sought after and have had faster annual price growth than luxury homes," said Frank Nothaft, chief economist at CoreLogic. "First-time buyers and investors are actively seeking lower-priced homes, and that segment of the housing market is in particularly short supply."
