The strongest quarterly sales pace in exactly a decade along with decreasing housing inventory has caused home prices to climb during the first three months of 2017, according to the latest quarterly report by the National Association of Realtors (NAR)®.
Metro prices for single-family homes have now risen for three consecutive quarters to $232,100 in the first quarter of 2017. This marked an increase of 6.9% from the first quarter of 2016 ($217,200) and the fastest growth since the second quarter of 2015 (8.2%). The median price during the fourth quarter of 2016 was up 5.9% from the fourth quarter of 2015.
The NAR said that single-family home values last quarter had seen gains in 85% of measured markets, with 152 out of 178 metropolitan statistical areas (MSAs) showing sales price gains in the first quarter compared with the first quarter of 2016. Twenty-five areas (14%) recorded lower median prices from a year earlier.
Thirty metro areas in the first quarter (17%) experienced double-digit increases (unchanged from the fourth quarter of 2016). Overall, there were slightly fewer rising markets in the first quarter compared to the fourth quarter of 2016, when price gains were recorded in 89% of metro areas.
The five markets with the most expensive single-family housing were San Jose with a median sales price of $1,070,000; San Francisco, $815,000; Anaheim-Santa Ana, California, $750,000; urban Honolulu, $746,000; and San Diego, $564,000.
The five lowest-cost metro areas in the first quarter were Youngstown-Warren-Boardman, Ohio, $79,200; Cumberland, Maryland, $81,800; Decatur, Illinois, $86,100; Elmira, New York, $90,000; and Binghamton, New York, $91,200.
Here is the Regional Breakdown from the NAR:
Total existing-home sales in the Northeast declined 2.2 percent in the first quarter but are 4.2 percent above the first quarter of 2016. The median existing single-family home price in the Northeast was $255,000 in the first quarter, up 2.2 percent from a year ago.
In the Midwest, existing-home sales dipped 4.3 percent in the first quarter but are 1.6 percent above a year ago. The median existing single-family home price in the Midwest increased 5.7 percent to $176,600 in the first quarter from the same quarter a year ago.
Existing-home sales in the South jumped 5.8 percent in the first quarter and are 5.8 percent higher than the first quarter of 2016. The median existing single-family home price in the South was $209,000 in the first quarter, 8.8 percent above a year earlier.
In the West, existing-home sales rose 1.6 percent in the first quarter and are 7.4 percent above a year ago. The median existing single-family home price in the West increased 8.4 percent to $342,500 in the first quarter from the first quarter of 2016.
Lawrence Yun, NAR chief economist, says continual supply shortages ignited faster price appreciation across the country in the first quarter. “Prospective buyers poured into the market to start the year, and while their increased presence led to a boost in sales, new listings failed to keep up and hovered around record lows all quarter,” he said. “Those able to successfully buy most likely had to outbid others – especially for those in the starter-home market – which in turn quickened price growth to the fastest quarterly pace in almost two years.”
Added Yun, “Several metro areas with the healthiest job gains in recent years continue to see a large upswing in buyer demand but lack the commensurate ramp up in new home construction. This is why many of these areas – in particular several parts of the South and West – are seeing unhealthy price appreciation that far exceeds incomes.”
Read more from the NAR at this link.