Typically, rising sales and home prices coincide. However, this was not true for the final three months of 2015. According the NAR (National Association of Realtors®), even though demand waned earlier in the year causing a 5.4 percent decline in sales, single-family home prices picked up and continued this pattern until the end of the year.
The NAR states that the reason for this variance was due to, “depressed supply levels in relations to the overall pool of prospective buyers continuing to life upward pressure on home prices in several metro areas;” this result of this variance is that even in some of the top job producing, but costly part of the country, homeownership is still out of reach for many qualified buyers.
The majority of metropolitan areas have experienced steady, slightly stronger price growth in the fourth quarter of 2014. The median single-family home price increased in 86 percent of the measured markets according the NAR report.
Why this data matters
According to the NAR’s chief economist, Lawrence Yun, sales activity has improved (compared to only a year ago). “Home prices in metro areas throughout the country continue to show solid price growth, up 25 percent over the past three years on average. This is good news for current homeowners but remains a challenge for buyers who are seeing home prices continue to outpace their wages. Low interest rates helped preserve affordability last quarter, but it’ll take stronger income gains and more housing supply to help meet the pent-up demand for buying.”
The national median existing single-family home price in the fourth quarter was $208,700, up 6.0 percent from the fourth quarter of 2013 ($196,900). For all of 2014, the median price increased 4.8 percent in the third quarter from a year earlier; 4.2 percent in the second quarter from a year earlier; and 8.3 percent in the first quarter from a year earlier.
The fastest growing markets in America
It may be surprising to see that San Diego (coming in at number 24) landed on the chart for the top 30 fastest appreciating housing markets. The top five fastest price appreciation markets are (and their respective percent of appreciation):
- Jacksonville, Florida (25.2%)
- Toledo, Ohio (21.2%)
- Punta Gorda, Florida (20.7%)
- Palm Bay-Melbourne-Titusville, Florida (18.7%)
- Topeka, Kansas (18.5%)
The final five areas that experienced price appreciation are:
- Raleigh-Cary, NC (10.6%)
- Portland-Vancouver-Beaverton, Oregon/Washington (10.3%)
- Phoenix-Mesa-Scottsdale, Arizona (10.3%)
- Fargo, North Dakota (10.3%)
- Florence, South Carolina (10.1%)
Are you surprised by any of these markets? Are there any areas you expected to see but did not?