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Tech Layoffs Hamper West Coast Housing Markets

CoreLogic has released new data covering February 2023 through its Home Price Index which overall found that home price growth remains in positive territory at 4.4%, marking 133 straight months of growth. 

However, the 4.4% of growth recorded in February was the lowest seen since 2019. Eight states and districts recorded annual home price losses, with much of the depreciation seen in the relatively expensive Western U.S., including California, Idaho, Oregon, Washington, and Utah. 

According to CoreLogic, tech company layoffs were the most likely culprit of falling home prices on the West Coast, but prices on the East Coast held steady. 

“The divergence in home price changes across the U.S. reflects a tale of two housing markets,” said Selma Hepp, Chief Economist at CoreLogic. “Declines in the West are due to the tech industry slowdown and a severe lack of affordability after decades of undersupply. The consistent gains in the Southeast and South reflect strong job markets, in-migration patterns and relative affordability due to new home construction.” 

“But while housing market challenges remain, particularly in light of mortgage rate volatility and the ongoing banking turmoil,” Hepp continued, “pent-up homebuyer demand is responding favorably to lower rates in many markets. This trend holds true even in the West, leading to a solid monthly gain in home prices in February. U.S. home prices rose by 0.8% in February, double the month-over-month increase historically seen and indicating that prices in most markets have already bottomed out.”

Top takeaways as highlighted by CoreLogic include:  

  • U.S. home prices (including distressed sales) increased by 4.4% year over year in February 2023 compared to February 2022. On a month-over-month basis, home prices increased by 0.8% compared with January 2023. 
  • In February, the annual appreciation of attached properties (5.4%) was 1.4 percentage points higher than that of detached properties (4%). 
  • CoreLogic forecasts show annual U.S. home price gains slowing to 3.7% by February 2024. 
  • Miami posted the highest year-over-year home price increase of the country's 20 tracked metro areas in February, at 15.6%, while Tampa, Florida continued to rank second at 9.3%. 
  • Florida and Maine recorded the highest annual home price gains, 11.3% and 10.3%, respectively. South Carolina posted the third-highest growth, with a 9.2% year-over-year increase. Eight states and districts recorded annual losses: Washington (-4.9%); Montana (-3.1%); Nevada (-1.7%); Idaho (-1.6%); Utah (-1.6%); California (-1.5%); Washington, D.C. (-1.2%); and Oregon (-0.7%). 

About Author: Kyle G. Horst

Kyle Horst
Kyle G. Horst is a reporter for DS News and MReport. A graduate of the University of Texas at Tyler, he has worked for a number of daily, weekly, and monthly publications in South Dakota and Texas. With more than 10 years of experience in community journalism, he has won a number of state, national, and international awards for his writing and photography. He most recently worked as editor of Community Impact Newspaper covering a number of Dallas-Ft. Worth communities on a hyperlocal level. Contact Kyle G. at [email protected].

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