After seven consecutive months of falling prices, the S&P/Case-Shiller US National Home Price Index rose in February, and the same uptrend continued in March.
latest data from black Knight It turns out that in 93 of the country’s 100 largest markets, prices rose during February to March, as against 79 in January-February.
This, of course, is traditionally expected as the spring months see a spike in prices as home buying demand increases. But growth is higher than expected, “A slight uptick in demand from home buyers offset a drop in supply for sales,” said Andy Walden, Black Knight’s vice president of enterprise research. “Just five months ago, prices were falling on a seasonally adjusted month-over-month basis in 92% of all major US markets. Fast forward to March, the situation has literally turned 180, with prices now rising in 92% of the markets since February.
It should be noted that most Key Year-to-date Metrics Indicate an environment of recovery and 2019 markets show more similarities than any post-pandemic year. As of March, only 28.5% of homes sold for more than list price, down -26% year-over-year. Prices declined by up to 14.3% (+7.7%), new listings declined by -22.5%, and average days on the market increased to 44 (+23). In short, demand is down, more homes are sitting on the market, but new listings aren’t coming online at the same rate as before, which helps explain why national prices are only -3.3% lower instead of higher. Are.
Personally, I am indifferent about this market. I think when you have homeowners with low fixed-interest rates, supply is constrained, higher mortgage rates keeping the application Underneath, there’s a real fear of an upcoming (or continuing, depending on who you ask) recession, record-low affordability, persistent inflation, banking fears, and the fact that multifamily and commercial real estate are crashing. There is a serious risk of being – it’s hard to be completely optimistic about the market.
However, some markets have shrugged off these dilemmas while others have taken a real hit. Real estate is local, and we have to deal with what’s in front of us.
Which markets are growing?
Despite problems in the economy, only seven of the 100 largest markets in the United States saw a month-over-month price decline. Leading the pack was Austin, Texas, which saw a drop of -0.72%, according to Black Knight.
Among markets that saw gains, Columbus, Ohio had the biggest increase (+1.08%). Below are the top 10 markets:
| housing market | percentage change MoM |
|---|---|
| Columbus, Ohio | 1.08% |
| Dayton, Ohio | 1.04% |
| Hartford, Connecticut | 1.04% |
| Worcester, Massachusetts | 1.04% |
| Youngstown, Ohio | 0.98% |
| Cleveland, Ohio | 0.96% |
| Cincinnati, Ohio | 0.91% |
| Akron, Ohio | 0.91% |
| Wichita, Kansas | 0.90% |
| Toledo, Ohio | 0.88% |
Here are the bottom 10 markets:
| housing market | percentage change MoM |
|---|---|
| Austin, Texas | -0.72% |
| Provo, Utah | -0.24% |
| Boise, Idaho | -0.13% |
| Salt Lake City, Utah | -0.12% |
| Ogden, Utah | -0.80% |
| San Antonio, Texas | -0.70% |
| Phoenix, Arizona | -0.40% |
| Dallas, Texas | 0.10% |
| Deltona, Florida | 0.13% |
| Houston, Texas | 0.15% |
The biggest takeaway is that the superstar markets of the pandemic boom, primarily Boise and Austin, are being hit the most. Austin continues to decline from its median sales price peak of $670,000 to $535,000 in May 2022, a decline of -16%.
Meanwhile, Miami hit a record high of $560,000.
Miami has emerged as the nation’s leading city for inbound migration, according to Redfin data, which helps explain why it’s still appreciating. But, like Austin during the pandemic, this rapid migration could eventually lead to a similar decline in the future once the dust settles — food for thought for anyone investing in Miami-Dade County.
What about improvement?
As I mentioned, prices tend to shoot up during this time of year. The big question ahead is whether the decline in the national market is over. Come winters, prices will definitely fall, but by how much? Have we really reached the “bottom” of the market?
Who knows. Two specific factors have driven the housing market recovery. The first is strength. Home prices in markets across the country reached all-time highs, forcing many potential home buyers out of the market. This naturally reduces demand as more and more buyers leave the market, putting downward pressure on prices. The second is the rate hike policy of the Federal Reserve, which has produced 10 rate hikes from March 2022 And has pushed the federal funds rate above 5%, its highest level in 16 years.
to a large extent well established That the Fed’s inflation battle would hurt real estate was kind of the point. Prices got too high (for everything, not just housing), and the Fed felt they needed to act, even though it was too late.
Now that reform is in full swing, the affordability, which is ever improved a bit This year, there is a positive trend that one can start working against.
On the other hand, the Fed is still hard to predict. For now, it is reasonable to assume that they will continue to raise interest rates until they bring inflation back to a more stable level.
What is that level, you ask? Well, 2% has been the standard for a long time, but these days Rumor has 3-4%, The Fed hasn’t publicly said anything about changing its long-held target, but depending on how things play out over the rest of the year, things could change, putting even more on the table. There can be uncertainty.
conclusion
Overall, it’s still too early to make definitive predictions about where things are going. Zillow It still holds that prices will rise by 0.6% this year. CoreLogic is even more optimistic, forecasting growth of 4.6%. On the other hand, Fannie Mae is expected price drop By 2024.
As investors, it is important to stay on top of this information and take everything you read and hear seriously. Do your own research, make your own decisions and protect your money.
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Note by BiggerPockets: These are the views expressed by the author and do not necessarily represent the views of BigPockets.
