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HOUSING PRICES Skyrocketed in JUNE – IS THIS GOING TO BE THE NEW NORMAL?

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.”

Sources:

US Home-Price Growth Rose to Record in June 

Soaring Home Prices Shattered Another Record in June, S&P Case-Shiller Says

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2 Comments

  1. Dan Tyree

    A new norm with a retard in control

    Reply
  2. Joseph S. Bruder

    Wow, Alice, you’re making my head spin… back to a more or less factual column…

    In my state, yes, housing prices have gone up, mostly because of COVID. People who can telecommute have decided, “why not just move into some nice quaint little town, and work from my bedroom?”. Prices went up as the supply went down. What they don’t realize is that the internet in these small towns typically sucks, so good luck telecommuting. And besides that, eventually, enough people will get vaccinated, and they’ll have to go back into the office. That 3 hour commute that you did once a month during COVID won’t look so great once your company decides to start requiring you to be fully vaxxed and come to the office every day.

    And part of the pressure on supply-and-demand is the fed’s interest rates. I just got a “pre-approved” offer in the mail, with an APR of 1.8%. That’s a full point and a half lower than the rate on my current mortgage, which I just changed a week or two before COVID hit.

    Gloomy Gus Boockvar, who says it’s unsustainable, is right. It won’t last. It’s another one of the COVID-induced spikes in supply and demand. And the woman who wants a $200,000 home in Massachusetts is delusional. I live near there, and unless you’re out in the far western farm-and-logging country, you’re not going to find a house within 2 hours of Boston for less than $400-500K.

    Another spike in supply is in vehicles. I was just about to buy a new pickup truck before COVID hit, and inventory disappeared overnight because of worker and supply shortages. It sucks, but I don’t expect it to be permanent. I’ll have to limp along with my ’97 Ford until they come back. If we could just get the rest of the population vaxxed, we wouldn’t be talking about a “new normal”, we’d be more-or-less going back to the “old normal”.

    Reply

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