CoreLogic predicts a decline in home prices in nearly every state by next year due to unemployment
By the end of summer, buying will slacken and we expect home prices will show declines in metro areas that have been especially hard hit by the recession. The U.S. housing market surprised economists by rallying in the midst of a pandemic. But the coronavirus may drag down home values after all. Prices will fall about 6.6% in the year through May 2021, the first annual decline since 2012, as the economic damage from the pandemic deepens, according to a forecast by CoreLogic Inc. Prices nationwide had climbed 4.8% in 12 months through this past May.
There’s at least a 75% chance of price declines in 125 metro areas by next May, led by getaway destinations in states such as Arizona and Florida that “faced the perfect storm of elevated Covid-19 cases and the subsequent collapse of the spring and summer tourism market,” according to the report. The last annual decline was in January 2012, at -0.3%.
The news is worse for the country’s casino capital. Prices in Las Vegas will plunge 20.1% as a plunge in tourism combines with values that were inflated before the pandemic, according to CoreLogic.
Meanwhile, in San Diego—where the market conditions are considered normal—home prices are forecasted to decline just 1.3% over the next 12 months. The firm projected declines of 11.7% in Boston, 9% in Denver, 7.4% in Houston, 6.3% in Los Angeles and 5.9% in New York.