Housing prices on the rise? Not a shocker. Housing prices jumping in one month by the largest percentage in 42 years? That one might catch even the most ardent real estate analyst off guard.
Just when you thought there was nothing else that could surprise you about the housing market…
This stems from data released by CoreLogic, a property analytics provider, that showed that home prices rose in June by 17.2% – the highest one-month growth since 1979.
It was no secret that the pressures of supply and demand during the pandemic are resulting in higher prices, but such a huge leap, month-over-month, is both rare and historical.
“Homes are on the market for the shortest period of time in history, averaging about two weeks – meaning half of the homes are selling faster than that.”
When you combine historically low mortgages and low inventory of homes for sale, that means there are going to be significantly more people who want to buy a home than the number of homes that are actually on the market.
This is what is creating a wild market with bids over the list price, all cash offers, and purchases being made sight unseen. This is why homes are on the market for the shortest period of time in history, averaging about two weeks – meaning half of the homes are selling faster than that.
This means affordability is going to remain a core problem on the hosing market in the near future, and maybe even longer.
The intense growth is stalling the market not just for the potential buyers, but for sellers as well. The reason being is folks who want to sell their home are waiting to list because they are often unable to find their next home within their budget.
As bad as it is for current homeowners looking to move, first-time homebuyers are in an even worse situation, as they struggle to come up with a down payment for any home, regardless of price.
Detached properties grew the most, according to CoreLogic. Their rate of price growth was 19.1%, significantly higher than the growth for attached properties (10.7%).
This is a result of the COVID-19 pandemic as it increased the desire for less dense neighborhoods and more living space, both inside the home and outside it.
The markets that saw the largest growth were Twin Falls, Idaho (40.2%) and Bend, Oregon (35.4%). Overall, the states with the largest jumps in price were Idaho (34.2%) and Arizona (26.1%).
However, this trend does seem a bit unsustainable, and when the market finally stalls, the growth will take a hit as well. While the values aren’t expected to decrease, they should stabilize, with prices expected to increase only by about 3% by the same time next year.
About the American Property Owners Alliance
The American Property Owners Alliance (The Alliance) is a nonpartisan, non-profit organization created to protect and support property owners and pave the way for future property owners. Our mission is to educate property owners about federal issues, laws and policies; to advocate for owners’ rights and interests; and to mobilize, when necessary, to secure those rights and interests.
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