Zillow’s October Real Estate Market Report found the national median price of a single-family home in October 2017 to be $205,4000, +12.5% higher than October 2016.
Obviously, this increase is great news for sellers. Not only are seller getting higher sales prices for their homes, they’re getting increased equity in their homes. Breaking down this statistical percentage a bit, start-up home sale prices are up +8.4% year over year and top tier homes are up +3.7%.
Conversely, what is great news for sellers is bad news for buyers. Dr. Suenja Gudell, the chief economist for Zillow, said. “…with homes gaining so much in value in just a year, buyers, especially first-time buyers, have to set aside more and more money for a down payment just to keep up with these prices.”
This monthly increase of +12.5% in home sale prices represents the 18th consecutive month values have risen by at least +6% year over year, double the “normal” annual rate of appreciation. ()”Normal” = +3% appreciation yearly.)
David M. Blitzer, the Dow Jones Indices Managing Director and Chairman of the Index Council, said, “The ongoing rise in home prices poses questions of why prices are climbing and whether they will continue to outpace most of the economy.”
Most experts point to historically low inventory as the cause of this meteoric accelerating gains in home sale prices. Zillow’s Gudell said, “We are in the midst of an inventory crisis that shows no signs of waning…and this inventory crisis is impacting potential buyers all across the country…Unfortunately, there are just not enough homes for sale…demand will continue to drive prices higher until we reach a better balance between supply and demand.”
According to Standard and Poor’s Core Logic Case-Schiller Home Price Index, San Jose ‘s home appreciation was up +12.3% to $1,076,400, the highest in the country. Simultaneously, San Jose’s inventory dropped by a halting -60.4%. Seattle and Las Vegas, ranking second and third in appreciation, increased +121.7% and 11/2%, respectively.
Dallas was the outlier in 2017. Both its home sales value and its inventory (as a result of new homes just built) were both up by +9.1% and +28.4%, respectively.
Other cities’ sale prices and inventories reflected the more common up and down percentages for October 2017…Sacramento sale prices were up +8.4% and inventory was down -21.8%; Cincinnati sale prices were up +5.5% and inventory was down -16.0%; Providence sale prices were up +8.2% and inventory was down -13.98%; Columbus sale prices were up +6.9% and inventory was down +25.5%.