HOUSING PRICES Skyrocketed in JUNE – IS THIS GOING TO BE THE NEW NORMAL?
The Case-Shiller index jumped 18.6% in June – a new record – as the ongoing demand for homes continues to exceed availability.
Calculated monthly by Standard & Poor, the Case-Shiller index tracks repeat-sales home prices in major metropolitan areas throughout the United States. The 18.6% figure represents growth from June 2020 to June 2021 and is the largest annual gain recorded since the index was introduced in 1987.
Figures calculated for the year ending May 31st and July 31st were 16.8% and 17.8%, respectively.
“The last several months have been extraordinary not only in the level of price gains, but in the consistency of gains across the country,” explains Craig Lazzara, who leads index investment strategy at S&P Dow Jones Indices.
Nowhere are prices increasing faster than in Phoenix, Arizona, which reported a YOY increase of 29.3% in June after leading the nation for 25 consecutive months.
Home prices nationwide are roughly 41% higher than they were during the 2006 housing boom, but the number of active listings is down more than 20% compared to last year.
Availability is particularly slim for lower-priced homes.
“At the price range that I needed, people are coming in and buying in cash, and they’re outbidding everybody,” complains Kristina Ahearn, a Massachusetts resident looking for a home costing less than $200,000. “Everything is selling for over the asking price, which is insane.”
Up to 45% of buyers have delayed purchasing a home due to the current market conditions, reports Ally Financial.
Home prices are growing at an “out of control pace that is unsustainable and unhealthy,” warns Peter Boockvar, chief investment officer at Bleakley Advisory Group, though he expects prices to cool as we move into autumn.
“We’re still seeing [homes] sell very quickly with multiple offers,” adds Matt Windsor, a real estate agent in Washington state. “What we’re not seeing is 15, 16, 17 offers anymore. It’s more like 2, 3, 4 offers.”