real estate

US Home Prices

US Home Prices

Home prices across the US tripled in growth compared to last year. According to Case Shiller and Corelogic, home prices are up 17% year over year.

No one has come up with a believable home price forecast for 2022 because there are quite a few demand factors including employment, stimulus funding, and the rate of economic recovery and growth.  These are affected by politics, trade relations, and forecasts. Negative outlooks can slow progress and euphoria can inflate existing housing bubbles.

So far, job growth is positive despite the constant setbacks caused by the Covid variants.  That only delays the recovery and demand for homes. Americans have such a strong preference for single detached homes that there isn’t enough land to satisfy it in the cities.

A completely new approach to the housing market is needed. Construction numbers are fine each month and they will pick up in the 2nd half, but they won’t even come close to supplying the numbers needed.

Suffice to say the US residential real estate markets are hot.  NAR forecasted a 5.7% increase during 2021, yet that conservative price estimate will likely be revised before long. There’s talk of cooling in the 2nd half, yet pent up demand from hungry buyers with all cash offers is still creating bidding wars.  Given the pandemic flight to safety still on, the demand for single detached homes will not subside, nor the prices.

This Chart from Corelogic shows the upward thrust of prices and that it would take a big event or dampening factors to cool it off fast. With other inflationary pressures caused by pandemic related shortages (lumber, steel, construction labor), the rising prices are further supported.  It’s unlikely the Fed will raise rates so buyers will feel pressured to buy soon to take advantage.  Supply side constraints such as mortgage qualification rules are likely not going to happen because the Democrats need the economy to roll into the 2022 senate elections in November 2022.

There is little to support the forecast of lower home prices anytime soon.  Current moderation in some regions is only due to the lag in reopening.

Add on predicted federal stimulus aid for infrastructure and other spending projects, and the economy has plenty of gas to grow further.

Home buyers are perplexed about whether to buy a home and sellers too about when to sell theirs.  Is this a housing bubble. Are the prices in Dallas, San Diego, Boston, and Los Angeles legitimate?  What’s driving home prices upward is a lack of supply. It’s the primary force and demand from Millennials wanting to start families as second.  Incoming immigrants will provide further price pressure.

Existing home prices.
Existing home prices. Screenshot courtesy of NAR.
Median price of home in US
Median price of home in US. Screenshot courtesy of Statista.

Because the most recent home price reports have the rate at 17%. Yes, the most recent home price report from NAR shows record prices and a trend that is up, up and up. You can read more about home prices in June in the housing market report.

HPI Case Shiller Home Price Chart
HPI Case Shiller Home Price Chart. Screenshot courtesy of Corelogic.com
Year over Year Home Price Change. Screenshot courtesy of NAR.

Suburban Home Prices Growing Fastest

Even with the pandemic exodus, buyers are drawn more to the suburbs, than urban or rural areas. Is this a supply issue, or is it expected they will be called back to the office after the pandemic has ended?

Price comparison for home in urban, rural and suburban areas. Screenshot courtesy of Redfin.

See more details on Florida home prices, California home prices, New York home prices, Boston home prices and Chicago home prices. Check recent home price growth in Seattle, San Antonio, Salt Lake City, Atlanta, Tampa, San Diego, San Francisco, Philadelphia, Denver, Houston, Austin and Colorado Springs.

Kiplinger conducted some home price growth research and founds some astonishing stats, particularly with respect to California real estate. Plenty of small to mid sized towns have grown fast. Upstate NY is another hot spot for buyers.  Lower housing costs, lower taxes, and work from home freedom is likely driving a good portion of the demand.

Home Price Growth in the Major US Metros

Metro Area (data from Kiplinger.com) Median Home Price % Change
1 Year
% Change
Since Peak*
% Change
Since Bottom†
Affordability Index
Oxnard, Calif. 650,000 17.6 8.9 80.1 10
New Haven, Conn. 235,150 17.1 -13.9 52.6 7
Rochester, N.Y. 153,000 16.9 44.4 60.3 3
Buffalo, N.Y. 160,000 16.5 85.2 77.1 4
San Jose, Calif. 1,160,000 16.2 58.2 117.5 10
Hartford, Conn. 237,500 15.2 -0.7 33.1 4
Modesto, Calif. 345,000 14.7 -2.2 147.8 9
Ogden, Utah 289,500 14.5 92.7 120.1 10
Greensboro, N.C. 160,000 14.2 26.5 53.1 3
Columbus, Ohio 219,000 13.8 38.7 93.9 4
Lansing-East. Lansing, Mich. 138,000 13.7 1.7 87.1 1
Bridgeport, Conn. 460,000 13.5 -9.7 38.9 8
Riverside-San Bernardino, Calif. 393,000 13.4 -3.1 111.1 10
Stockton, Calif. 400,000 13.2 -0.8 147.7 10
Seattle, Wash. 525,000 12.8 47.5 117.2 9
Cleveland, Ohio 146,000 12.7 2.5 78.4 1
Fresno, Calif. 299,000 12.7 -5.8 91.8 9
Harrisburg, Pa. 175,000 12.7 16 37.9 2
Memphis, Tenn. 156,400 12.7 11.9 80.8 2
Bakersfield, Calif. 245,000 12.4 -11.6 89.8 7
Milwaukee, Wis. 228,417 12.4 0.5 68.9 2
Worcester, Mass. 260,000 12.3 18.1 90.6 6
Detroit, Mich. 181,815 12.1 7 136.9 4
Winston-Salem, N.C. 165,000 12.1 22.7 55.6 3
Phoenix, Ariz. 308,900 11.9 4.1 98.6 7
Albany, N.Y. 215,000 11.7 17.5 41.4 4
Grand Rapids, Mich. 210,000 11.7 50 116.1 5
Albuquerque, N.M. 180,000 11.6 11.5 55.3 6
San Diego, Calif. 620,000 11.5 22.3 91.2 10
Tucson, Ariz. 229,000 11.5 -1 74.6 6
Indianapolis, Ind. 185,000 11.4 28.2 91.3 1
Colorado Springs, Colo. 345,000 11.2 57.7 85.6 8
Philadelphia, Pa. 240,000 11 6.9 48.4 1
Springfield, Mass. 217,500 10.8 18.1 67.9 6
Knoxville, Tenn. 196,000 10.7 35.4 68.2 3
Richmond, Va. 257,000 10.7 16 59.6 7
Chattanooga, Tenn. 189,000 10.3 46.4 71.7 4
Lakeland, Fla. 200,000 10.2 -6.1 100.6 6
Nashville, Tenn. 298,000 10.2 69.3 94.4 5
Cincinnati, Ohio 179,000 10.1 28 72.3 1
New Orleans, La. 210,000 10.1 40.1 68.2 3
Palm Bay, Fla. 210,000 10 1.5 112.9 5
Austin, Texas 340,000 9.9 95.2 97 9
Charlotte, N.C. 255,000 9.7 -12.4 77.3 4
Chicago, Ill. 252,000 9.7 -12.4 77.3 5
New York, N.Y.-N.J. 450,000 9.7 3.1 51.1 10
Virginia Beach, Va. 250,000 9.7 -5.3 34.9 9
Atlanta, Ga. 250,000 9.5 21.3 115 4
San Francisco, Calif. 930,000 9.5 31.7 110.3 10
Miami, Fla. 302,000 9.3 -12.9 101.6 8

 

Buyers from California to Texas to Florida and New York are asking about a possible housing price crash, but the economy doesn’t look like it will suffer a setback anytime soon. Once the wishful thinking subsides and house construction picks up, we’ll see more confidence that house prices will continue high but more homebuyers will be successful in finding a home and more sellers will be willing to let go of their home and get on with their lives.

Home sales contracts timeline history chart. Screenshot courtesy of NAR.Home Sales by Price

Home sales by price category.
Home sales by price category. Screenshot courtesy of NAR.

Realtor.com housing Market Forecast 2021

Last year, price growth before the pandemic stood around 8%. Logic tells us with a recovery plus trillions in stimulus money along with low construction levels, huge demand and low mortgage rates, that home price growth could exceed 20%.

Whether it’s resale homes or new homes, the economy is reawakening with fits and starts due to the pandemic.  We haven’t seen a synchronicity in this yet.  Both resale and new home inventory is low, especially product in the starter home price category. Sales of luxury priced homes however are booming.

Case Shiller Price Forecasts

Last June, Corelogic predicted a home price drop in 2021.  That has not transpired and likely won’t anytime soon.

Housing Price Hotness Index

NAR offers its rating of the hottest housing markets:

City Nielsen hotness Index hotness_rank hotness_rank this month supply score demand score median listing price
kingston, ny 234 47 190 100 49.8 $339,900
iowa city, ia 240 77 158 100 34.8 $281,900
peoria, il 130 57 157 100 49.5 $138,800
utica-rome, ny 162 44 149 100 57.9 $169,500
iowa city, ia 240 127 135 98 14.0 $276,000
lebanon, pa 299 17 131 79 94.0 $236,000
bloomington, in 244 46 129 79 70.6 $315,000
lincoln, ne 155 52 124 100 49.8 $313,480
rapid city, sd 265 54 123 70 72.6 $305,712
buffalo-cheektowaga-niagara falls, ny 47 50 120 71 74.6 $240,000
allentown-bethlehem-easton, pa-nj 66 11 120 91 86.3 $269,450
columbia, mo 237 112 118 89 29.1 $247,100
springfield, il 198 69 116 100 40.1 $153,900
springfield, mo 110 91 115 74 51.2 $230,000
binghamton, ny 180 79 114 65 67.6 $162,450
jacksonville, nc 239 101 111 63 60.2 $218,229
reading, pa 128 12 110 82 94.0 $249,950
columbia, mo 237 69 110 75 59.5 $249,900
detroit-warren-dearborn, mi 12 71 106 94 41.8 $274,900
columbia, mo 237 35 105 89 69.6 $269,900
hagerstown-martinsburg, md-wv 183 36 105 92 63.5 $271,900
iowa city, ia 240 179 105 82 5.0 $289,900
lancaster, pa 103 15 103 84 91.0 $319,450
decatur, al 266 44 102 72 73.2 $219,900
allentown-bethlehem-easton, pa-nj 66 52 102 64 82.9 $242,900
pottsville, pa 278 43 101 62 95.3 $108,500
hagerstown-martinsburg, md-wv 183 97 101 70 52.8 $245,000
myrtle beach-conway-north myrtle beach, sc-nc 111 188 97 17 66.6 $255,000
johnstown, pa 290 144 96 5 98.7 $74,900
charleston, wv 190 159 95 14 84.9 $148,750
ann arbor, mi 142 101 92 61 62.9 $456,990
chambersburg-waynesboro, pa 271 63 90 56 84.3 $241,200
state college, pa 270 39 90 72 86.0 $337,314
gainesville, ga 246 58 88 75 66.9 $364,900
lebanon, pa 299 38 88 69 94.6 $239,950
flint, mi 121 40 87 73 85.3 $208,900
sebastian-vero beach, fl 254 130 86 57 53.2 $346,850
warner robins, ga 229 82 86 91 40.5 $236,773
yuma, az 245 51 85 73 78.9 $255,000
redding, ca 227 131 85 70 39.8 $345,000
cedar rapids, ia 169 108 85 80 43.1 $229,621
harrisburg-carlisle, pa 91 30 85 66 93.6 $221,043
fort collins, co 147 68 84 79 60.5 $529,500
rocky mount, nc 274 75 84 46 85.3 $186,950
redding, ca 227 105 84 68 50.5 $402,000
la crosse-onalaska, wi-mn 293 41 83 68 86.3 $261,650
tupelo, ms 300 184 81 53 31.4 $278,500
st. cloud, mn 223 121 81 65 49.2 $287,200
st. cloud, mn 223 82 81 61 71.2 $269,900
muskegon, mi 243 12 81 87 90.3 $219,900
york-hanover, pa 117 13 79 86 89.3 $255,650
yuma, az 245 152 79 46 56.2 $232,757
bloomington, il 224 131 79 63 48.2 $152,229
boulder, co 152 112 78 47 71.6 $937,500
atlanta-sandy springs-roswell, ga 9 123 78 63 47.5 $352,088

 

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In the burbs and outlying towns, particularly in the midwest, we could see bidding wars.

As you can see, home prices in the major metros were doing well.  These are price growth numbers from the last 12 months including the last very difficult three months.

Home price growth last 12 months. Screenshot courtesy of Corelogic.

The Migration out of Cities

People are becoming more mobile as high home costs push them out of congested, high priced urban areas to more affordable regions. The new work at home mandate means workers don’t have to be chained to their employer’s physical office location.  And employers too may abandon urban sites for new locations in America’s heartland. They’re looking for the best cities to buy real estate.

Case Shiller Home Price History Chart

The housing experts need to take another look at this chart (see also the housing crash timeline chart). Even through the worst mini-recession ever, home prices keep rising. This upward direction is steepening as it did in 2005/2006.

Home Price History Chart
Screenshot courtesy of FRED st louis fed.

Is this the best time to buy a home? Will buyers get a break later on in 2020 if they wait? Is this a buyers market? It just may be the right time as the forecast is a return of price growth after the current slowdown.

Can you assess a housing market without looking at:

  1. economic predictions,
  2. consumer confidence
  3. wages and employment
  4. GDP and trade deficits
  5. work at home trends
  6. fears of disease in high density regions, going forward
  7. stock market predictions?

Check the health and predictions for major cities: Los AngelesNew YorkSeattleChicagoPhiladelphiaSan DiegoMiamiBostonBay AreaSacramento, and Atlanta. See forecasts for California housing and Florida housing markets.

Reuters polled a number of housing market analysts at the end of a weak month in home sales, and this is still what they believe going forward to 2021:

A look back at how right they were about home price rises. With the cessation of the Corona Virus, the demand for homes will resume.

The most recent Reuters poll reflects a belief in rising home prices yet are less enthusiastic about price rises. And they’re divided.  19 of 34 analysts said U.S. housing market activity this year was likely to accelerate while the other 15 analysts believe it would slow.

The Jan. 12-Feb. 1 poll of nearly 40 housing analysts forecast the U.S. Case-Shiller house price index to rise 5.7% this year and 4.6% in 2022, the highest since polling began for both periods

Home Price Outlook from Reuters Poll
Screenshot courtesy of Reuters

And from a reuters news report on the economy, Joel Naroff, chief economist at Naroff Economic Advisers is quoted as saying, “Everything seems to be moving in the right direction in the economy … The weak links are recovering and the strengths are staying strong. The Fed is not going to continue doing nothing.”  That would mean he expects the Fed to raise interest rates, and that would push the US dollar to further highs.

Best Cities to Invest?

Cross reference this compiled list of cities with a previous post on best cities to buy property.

For rental income, Silicon Valley, Los Angeles, Dallas, San Diego, and Boston might be best picks. It might be a case of the usual suspects, but start here, work your way to the best zip codes and neighborhoods, types of house, employment growth, and migration patterns of Millennials, and you may have yourself a winner (real estate investment). Who knows which cities will rule after 4 years of the Trump overhaul of the US government and US economy?

Top Home Price Growth Trends

Price growth varies each quarter. These are the latest prices from Kiplinger. California cities come in as the least affordable in the nation. New York, Washington DC, Honolulu, and Seattle are right up there.

Metro Area Median Home Price % Change
1 Year
% Change
Since Peak*
% Change
Since Bottom†
Affordability Index
Oxnard, Calif. 650,000 17.6 8.9 80.1 10
New Haven, Conn. 235,150 17.1 -13.9 52.6 7
Rochester, N.Y. 153,000 16.9 44.4 60.3 3
Buffalo, N.Y. 160,000 16.5 85.2 77.1 4
San Jose, Calif. 1,160,000 16.2 58.2 117.5 10
Hartford, Conn. 237,500 15.2 -0.7 33.1 4
Modesto, Calif. 345,000 14.7 -2.2 147.8 9
Ogden, Utah 289,500 14.5 92.7 120.1 10
Greensboro, N.C. 160,000 14.2 26.5 53.1 3
Columbus, Ohio 219,000 13.8 38.7 93.9 4
Lansing-East. Lansing, Mich. 138,000 13.7 1.7 87.1 1
Bridgeport, Conn. 460,000 13.5 -9.7 38.9 8
Riverside-San Bernardino, Calif. 393,000 13.4 -3.1 111.1 10
Stockton, Calif. 400,000 13.2 -0.8 147.7 10
Seattle, Wash. 525,000 12.8 47.5 117.2 9
Cleveland, Ohio 146,000 12.7 2.5 78.4 1
Fresno, Calif. 299,000 12.7 -5.8 91.8 9
Harrisburg, Pa. 175,000 12.7 16 37.9 2
Memphis, Tenn. 156,400 12.7 11.9 80.8 2
Bakersfield, Calif. 245,000 12.4 -11.6 89.8 7
Milwaukee, Wis. 228,417 12.4 0.5 68.9 2
Worcester, Mass. 260,000 12.3 18.1 90.6 6
Detroit, Mich. 181,815 12.1 7 136.9 4
Winston-Salem, N.C. 165,000 12.1 22.7 55.6 3
Phoenix, Ariz. 308,900 11.9 4.1 98.6 7
Albany, N.Y. 215,000 11.7 17.5 41.4 4
Grand Rapids, Mich. 210,000 11.7 50 116.1 5
Albuquerque, N.M. 180,000 11.6 11.5 55.3 6
San Diego, Calif. 620,000 11.5 22.3 91.2 10
Tucson, Ariz. 229,000 11.5 -1 74.6 6
Indianapolis, Ind. 185,000 11.4 28.2 91.3 1
Colorado Springs, Colo. 345,000 11.2 57.7 85.6 8
Philadelphia, Pa. 240,000 11 6.9 48.4 1

 

US Real Estate Market to 2021

Please see the major metro market reports for 2021 and beyond including Denver, DallasAtlanta, Chicago, San Francisco, Houston, Tampa, New York, Los Angeles, San Diego, Seattle, and Philadelphia.

Bookmark this page and return for further forecasts, predictions and market data for California, Florida, Illinois and most major US cities including  Los Angeles, New York City, San Diego, San Francisco, Houston, and Miami.

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