Home Prices Shot Up Across the U.S. in Late 2015
Just as we’d predicted, home prices are heading up, up, up—good news for home sellers, But not so much for prospective buyers.
National median housing prices shot up 6.9% to $222,700 in the fourth quarter of 2015, according to a recent report from the National Association of Realtors®. That’s up from $208,400 for single-family homes in the last quarter of 2014.
Home buyers in the West (which includes pricey Silicon Valley) and the South saw the biggest price hike—and would-be buyers there are experiencing the worst sticker shock.
Four of the most expensive markets in late 2015 were (unsurprisingly) in California. San Jose, seat of the tech industry, topped the list, with median price of a single-family home at a whopping $940,000. The city was followed by San Francisco, at $781,600; Honolulu (those tropical breezes don’t come cheap), at $716,600; Anaheim-Santa Ana, Calif., at $708,700; and San Diego, at $546,800.
San Jose’s appeal has long been centered on its high-paying tech jobs, good schools, and friendly neighborhoods. But San Jose agent Holly Barr with the Sereno Group says she sees more and more local homeowners playing Take the Money and Run: selling their homes, pocketing the cash, and moving to lower-cost cities in Washington and Oregon.
Housing prices are up in the South as well, because companies are moving jobs out of higher-priced, metropolitan hubs to the cheaper—and warmer—locales. Those workers are then essentially competing with one another to buy homes, says Joanna Keskitalo, a Greenville, S.C.-area real estate broker at Joanna K Realty.
The last property she listed, a three-bedroom, two-bathroom house in a suburb of Greenville, received three offers in under 24 hours. The $165,000 home sold for well over its asking price.
The housing shortage is compounded by the lack of new home construction—shrinking the pool of available homes even further, says realtor.com’s chief economist, Jonathan Smoke.
The high price tags in cities, combined with lower gas prices for commuters, are compelling more people to consider a move to the suburbs, he adds.
“We’ve shifted from having too much inventory, driven by foreclosures, to one where we have nearly record low levels of homes for sale on the market,” says Smoke.
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