The National Association of Realtors (NAR) recently released its latest quarterly study on home prices for 2017. Looking at 178 markets across the country, NAR found 1.83M homes for sale in the first quarter of 2017, a 6.6% decrease in the number of homes for sale in the same quarter of 2016. NAR also saw the first quarter median sale prices hitting $232,100. nation-wide for 2017, an increase of 6.9% from 2016. This translates into a nearly double (3.9%) price growth forecasted by Realtor.com for 2017.
“Prices are increasing faster than we expected…due to the continual shortage of new homes coming onto the market,” says Joseph Kirchner of Realtor.com. “People who had been holding back on buying a home…now have good, steady jobs and are less worried about losing their jobs…and (they are) going into the housing market.”
These sales prices are the strongest quarterly sales prices in a decade. However, Kirchner goes on to say, that if these inventory shortages persist, prices could rise 7-8% year over year in 2017. Such percentage increases would mean that buyers on budgets “…will be able to afford one less bedroom or (will have to) accept a house with a longer commute.”
NAR’s chief economist, Lawrence Yun, points out that prospects who were able to successfully buy homes “…most likely had to outbid others…particularly those in the ‘starter’ home market.” Yun also points out that the “…metro areas with the healthiest job gains…continue to see large upswings in buyer demand but…(on the other hand)…lack commensurate ramp up in new home construction…(the reason why) areas, particularly several parts of the South and the West, are seeing unhealthy price appreciation that far exceeds incomes.”
Clearly, the West is the most expensive housing region in the country with a median sales price of $342,500. for existing single family homes, an 8.4% increase over last year. (Median sales prices in San Jose – $1,070,000., San Francisco – $815,000., Anaheim – $750,000., San Diego – $564,000. and with Honolulu coming in at fourth place – $746,000.) The Northeast’s median sales price is $255,000., up 2.2% annually. The South’s median sales price is $209,000., up 8.8%. The Mid West is the most affordable with a median sales price of $176,000.
Singing the praises of the Mid West is Ron Herms, Sellstate Performance Realty inLincoln Nebraska. “You can get a much nicer home here than in many places in the country for quite a bit less. A lot of states in the Mid West are going to be similar…(and) the quality of life in the Mid West is very good.”
