REAL ESTATE MARKET WATCH: Risk of Price Decline Over Next Two Years Only 2 Percent
By Bobby Freeman, Realtor // April 15, 2016
ABOVE VIDEO: Florida’s risk of a price decline over the next two years is only 2 percent in 24 Florida counties.
The likelihood of home price declines across the United States over the next two years remains low at 5 percent, according to Spring 2016 Housing and Mortgage Market Review published by Arch Mortgage Insurance Company.
For most of Florida, the risk is even lower.
Locally, Florida’s risk of a price decline over the next two years is only 2 percent in 24 Florida counties. And the likelihood in a handful of other places, such as Palm Beach County, is only 3 percent.
The report by Arch MI attempts to gauge the likelihood that home prices will be lower in two years based on recent economic and housing market data. Despite the low overall risk of home price declines, however, some areas in the “Energy Patch” states (coal, oil or natural gas producing areas) remain at heightened risk.
“I don’t see the real estate market slowing down anytime soon especially on Florida’s Space Coast,” said Jennifer McCoy Broker-Associate for RE/MAX Elite’s McCoy-Freeman Group in Brevard County.
While home prices probably won’t decline even there, they may experience slower than normal economic and home price growth, according to Arch.
“Apart from a subset of energy extraction states, home prices should rise faster than inflation thanks to strong fundamentals,” said Dr. Ralph G. DeFranco, Arch MI’s Chief Economist.
“Positives include strong affordability, home prices generally below their historical relationship with incomes, U.S. job growth of more than 2 million jobs a year, and a low levels of construction relative to growing demand.”
On a state level, Alaska, North Dakota, Wyoming and West Virginia currently have the highest risk of home prices declines. Total employment continues to weaken in those states, even as home prices continue to rise.
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