Home prices keep rising

The Federal Housing Finance Agency (FHFA) found that house prices across the nation rose 16% from April 2020 to April 2021.

From March to April, house prices across the nation rose 1.8%, surpassing the previous month’s 1.6% increase.

Three regions — the Pacific coast, the western states and New England — saw more pronounced year over year increases. The FHFA index tracks seasonally-adjusted, purchase data from Fannie Mae and Freddie Mac.

In the mountain division, which includes Colorado, New Mexico, Idaho, Wyoming, Utah, Nevada, Arizona and Wyoming, house prices rose 21% year over year. In the pacific division, encompassing Washington, Oregon and California, prices rose 18%. In Maine, Vermont, New Hampshire, Massachusetts, Connecticut and Rhode Island, house prices also rose 18%.

“House prices recorded another monthly and annual record in April,” said Dr. Lynn Fisher, FHFA’s deputy director of the division of research and statistics. “This unprecedented price growth persists due to strong demand, bolstered by still-low mortgage rates, and too few homes for sale.”

Mortgage rates rose above 3% for the first time in 10 weeks last week. Mortgage applications are still on the rise, however.

House prices have risen during the past year as a result of elevated lumber prices, a lack of available homes and increased demand for homes.

Lockdowns early in the pandemic led many to work from home and divide their living space into home offices. Those who were able to bought homes with more space, better suited to the pandemic remote work trend.

That has led to astonishing price increases in markets like Seattle, where the median home-sale price rose more than 26% year-over-year to a record $737,800 in May 2021. Tech employees there, faced with working remotely from cramped apartments, instead hunted for homes with more space.

“I’ve never seen anything like this housing market,” a Seattle-area Redfin agent said.

~by Georgia Kromrei, HousingWire

Seattle Area Housing Market: Big Demand, Little Supply

Home buyers in the Seattle area are up against the toughest purchasing prospects in the country.

The Seattle Times cited the monthly Case-Shiller home price index, which showed a 12.3-percent year-over-year increase for single family home prices in the metro area in March. It’s the fastest growth in more than three years and easily outdistances increases in Portland (9.2 percent), Dallas (8.6 percent), Denver (8.4 percent) and Boston (7.7 percent).

Seattle also more than doubles the national average for price gains, which are at 5.8 percent.

Seattle-based real estate company Redfin released its Demand Index on Tuesday, and it shows what buyers are certainly learning the hard way as prime selling season approaches — there just aren’t enough houses available for interested parties.

Seattle is the most inventory-constrained metro, as measured by months of supply, but it also has the third smallest amount of inventory, following Oakland and San Francisco, Redfin said. Seattle posted the largest year-over-year decrease in inventory, down 35 percent from last April. In the same period, the number of Redfin customers making offers climbed by 36.9 percent, an indication that the market is more competitive for buyers this year than it was last year.

“There’s no indication that this market is going to see a drastic increase in supply or a drop in demand, so waiting isn’t an option for a serious buyer,” said Redfin Seattle agent Kyle Moss in the company’s blog post. “People intent on purchasing this season should be discerning and focus on the one or two criteria that are most important to them, like commute time and/or schools. From there, carve out a list of homes that meet your qualifications and work alongside an agent who has experience winning offers in competitive situations to build and execute a competitive strategy that fits your budget.”

That inventory crunch, in a city attracting thousands of new well-paid tech workers to companies such as Amazon, Facebook, Google, Expedia and others, is leading to the highest rate of bidding wars among the cities that Redfin tracks in other hot markers. In Seattle in April, 88.7 percent of homes received multiple offers, outpacing Los Angeles (79.3 percent), Oakland (78.6 percent), San Diego (77.5 percent) and Washington, D.C. (73.9 percent) among others.

The Times said extra offers often drive prices higher, and the typical single-family house in the city last month sold for a record $722,000.

~Kurt Schlosser, Geekwire

King County median home price up 12.5 percent from June 2012

Last month was the third in a row the median price topped $400,000 and the 15th straight month of year-over-year price increases.

The recession may have permanently hit paychecks and the number of jobs available, but median prices for homes sold in the Seattle area are approaching the peak hit six years ago before the housing market tanked.

The Northwest Multiple Listing Service reported Wednesday that the median sale price of a single-family home in King County in June was $427,500, up 12.5 percent from the same month a year ago and up 2.4 percent from May. That’s just $27,500 from the highest median price of $455,000, hit in July 2007.

June was the third consecutive month the median price topped $400,000 and the 15th straight month of year-over-year price increases.

But the traditional summer buyer enthusiasm has already dampened, says Tim Ellis, founder and editor of Seattle Bubble, a real-estate news site.

“Sales dipped between May and June. The fact there was any dip at all at this time of the year indicates cooling among buyers,” Ellis said.

Another factor may be fewer homes for sale. There were only 4,203 homes on the market last month, down 17 percent from last June, while pending sales topped 3,000, up 11.4 percent from a year ago.

Seattle was the 10th-hottest market in the country in May, with 46 percent of homes under contract within two weeks of being listed, and 32 percent under contract in one week or less, according to a report issued this week from RedFin.com, a real-estate company.

Mike Gain, CEO and president of Prudential Northwest Realty Associates in Seattle, says with so many prospective buyers out there, bidding wars have intensified. “Buying is not for everyone, but if you’re going to be in the area for a long time, this is an opportune time,” Gain said.

In Snohomish County, the median sale price for a single-family home rose 13.2 percent from a year ago to $300,000. In Pierce County, it rose 11.3 percent to $224,900. Kitsap County saw a 1 percent drop from a year ago to $247,475.

Condo prices also rose in King and Snohomish counties compared with a year ago. King County’s median price rose 11.3 percent to $244,950. In Snohomish County, it rose 25.2 percent to $179,975.

The recent uptick in mortgage rates may be pushing hesitant buyers off the fence. The 30-year fixed mortgage rate dropped to 4.29 percent from 4.46 percent a week ago, Freddie Mac reported Wednesday. The rate has hovered around 3.5 percent for much of the last year.

Svenja Gudell, senior economist at Zillow.com, a real-estate information site, said in an email the historically low mortgage rates were not sustainable but that the rise is not necessarily bad news, nor will it derail the housing recovery.

“We anticipate mortgage rates to continue this upward trend,” she said. “But rates of 6 percent seem like a steal, considering the average 30-year fixed rate over the past 42 years was roughly 8.5 percent, according to Freddie Mac.”

~Marissa Evans, Seattle Times

Seattle-area home prices maintain upward march

Prices were up 4.8 percent from September 2011, setting yet another post-bubble record. All signs point to steady recovery in the housing market.

Seattle-area home prices kept climbing in September, according to the closely watched Standard & Poor’s / Case-Shiller home price index.

Prices were up 4.8 percent from September 2011, setting yet another post-bubble record. August’s 3.4 percent year-over-year gain had been the previous high.

Seattle-area prices now have increased year-over-year for five straight months, according to Case-Shiller.

The numbers are for the Seattle metropolitan area — King, Snohomish and Pierce counties. The September statistics, the most recent available, were released Tuesday.

Seattle prices also increased 0.3 percent between August and September, reversing a 0.1 percent decline from July to August.

Nationally, Case-Shiller’s 20-city composite index was up 0.3 percent month-over-month and 3 percent year-over-year. Eighteen of the 20 metropolitan areas Case-Shiller tracks saw prices rise from September 2011 levels, with only Chicago and New York experiencing declines.

In Phoenix, prices jumped 20.4 percent over the 12-month stretch to lead all cities; prices in Atlanta showed a modest 0.1 percent increase, ending 26 straight consecutive year-over-year declines.

Prices increased in 13 cities between August and September, led by 1.4 percent increases in Las Vegas and San Diego.

“It is safe to say that we are now in the midst of a recovery in the housing market,” said David Blitzer, chairman of the Index Committee at S&P Dow Jones Indices.

When seasonal factors are taken into account, September’s increase from August is even more impressive, he added.

The Seattle area’s Case-Shiller score for September was 142.09, meaning prices were 42.09 percent higher than in January 2000. The metropolitan area’s high, 192.30, came in July 2007.

The region’s lowest score since the real-estate bubble burst, 128.99, occurred in February. Since then prices have risen a little more than 10 percent.

But, despite those gains, Seattle’s September Case-Shiller score still is lower than it was from March 2005 to October 2010 — a stretch of more than five years.

Two experts offered differing forecasts on what’s immediately ahead for housing nationally.

“We will see the market continue to strengthen as inventory available for sale continues to decline,” said Richard Green, director of the University of Southern California’s Lusk Center for Real Estate.

“Additionally, Case-Shiller is a month behind, so these results do not reflect the full strength of price movements that occurred in October and so far this month.”

But Stan Humphries, chief economist at Seattle-based online real-estate marketplace Zillow, said September probably is “the last hurrah” this year for month-over-month price gains.

He attributed that to seasonal factors and a projected increase in the number of bank-repossessed homes in the sales mix.

“This shouldn’t, however, be a cause for concern,” Humphries added, “as the Case-Shiller indices will still end the year up more than 3 percent from year-ago levels, clear evidence of a durable housing recovery.”

Steady increases in home prices have helped encourage more potential buyers to come off the sidelines and purchase homes. And more people may put their homes on the market as they gain confidence that they can sell at a good price.

Higher home prices can also make homeowners feel wealthier and more likely to spend more. Consumer spending accounts for about 70 percent of the U.S. economy.

A big reason for the rebound is that the excess supply of homes that built up before the housing crisis has finally thinned out. The number of previously occupied homes available for sale has fallen to a 10-year low. The inventory of new homes is also near the lowest level since 1963.

At the same time, more people are looking to buy or rent a home after living with relatives or friends during and immediately after the Great Recession.

Those trends are also pushing up home sales and construction. Sales of previously occupied homes are near five-year highs, excluding temporary spikes in 2009 and 2010 when a homebuyer tax credit boosted purchases.

Builders, meanwhile, are more optimistic that the recovery will endure. A measure of their confidence rose to the highest level in six and a half years this month. And builders broke ground on new homes and apartments at the fastest pace in more than four years last month.

~Eric Pryne