Sarasota-Manatee home appreciation still well above nation average, but now past the peak

Derek Gilliam, Sarasota Herald-Tribune
·3 min read

For the first time in 21 months, national home appreciation figures did not increase by more than double digits late last year, posting a year-over-year increase of 8.6%, according to the CoreLogic Home Price Index.

Sarasota-Manatee area's home price growth, according to data released in January by CoreLogic on November sales, came in at 19.6%, more than double the national average, but 1.16% below the housing market's peak price.

CoreLogic's Home Price Index incorporates "more than 45 years of repeat-sales transactions for analyzing home price trends." They are widely considered a leader in real estate data analytics and release monthly reports on housing markets across the country.

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The firm's January report said November's sales figures posted the lowest rate of home price growth in two years and that "appreciation is decelerating in many popular housing markets across the country."

"Nationwide, the recent price deceleration pushed November home values 2.5% below the spring 2022 peak," the news release about the report noted. "In 2023, home values will likely move even further from that high point, as CoreLogic expects price growth to begin recording negative year-over-year readings in the second quarter."

Home prices have been hit hard by rising mortgage rates as the Federal Reserve tries to get inflation under control.
Home prices have been hit hard by rising mortgage rates as the Federal Reserve tries to get inflation under control.

Selma Hepp, deputy chief economist at CoreLogic, said because of the strong home price growth in the first half of 2022, she expects that total 2022 appreciation will come in only slightly lower than 2021.

The North Port-Sarasota-Bradenton metro area recorded 33.4% home price appreciation in 2021, compared to national home price appreciation of 15%, according to CoreLogic data.

“However, 2023 will present its own challenges, as consumers remain wary of both the housing market and the overall economic outlook," she said. "And while the recent decline in mortgage rates may bode well for the housing market, potential homebuyers are grappling with the idea of buying amid possible further price declines and a continued inventory shortage. Nevertheless, with slowly improving affordability and a more optimistic economic outlook than previously believed, the housing market could show resilience in 2023.”

While the housing market may be seeing strong signs of a cool down, the area's rental market continues to show growth while the rest of the country has started to see lower rents.

Apartment List's January rent report said that 90 of the 100 largest cities in the U.S. posted declining rents in December, but the Sarasota rental market increased by 0.9%. Prices across the country posted a 0.8% decrease.

Rents in Sarasota are up by 46.9% since March 2020, the start of the COVID-19 Pandemic. But because rents increased so dramatically in 2021, year-over-year rent growth in December came in at just 2%.

Median rents in Sarasota for a one-bedroom apartment was $1,432 and $1,889 for a two-bedroom, according to Apartment List data.

This article originally appeared on Sarasota Herald-Tribune: Sarasota-Manatee home price appreciation more than double national average