Rising home prices, higher interest rates and increased building material costs have pressured housing affordability to a ten-year low, according to the National Association of Home Builders. Keen market observers have been watching this situation take shape for quite some time. Nationally, median household income has risen 2.6% in the last 12 months, while home prices are up 6.0%. That kind of gap will eventually create fewer sales due to affordability concerns, which is happening in several markets, especially in the middle to high-middle price ranges.
New Listings were down 13.1 percent for single family homes and 26.6 percent for Condo/TIC/Coop properties. Pending Sales decreased 16.1 percent for single family homes but increased 9.0 percent for Condo/TIC/Coop properties.
The Median Sales Price was up 12.5 percent to $1,550,000 for single family homes and 6.3 percent to $1,249,500 for Condo/TIC/Coop properties. Months Supply of Inventory remained flat for single family units but was down 33.3 percent for Condo/TIC/Coop units.
While some are starting to look for recessionary signs like fewer sales, dropping prices and even foreclosures, others are taking a more cautious and researchbased approached to their predictions. The fact remains that the trends do not yet support a dramatic shift away from what has been experienced over the last several years. Housing starts are performing admirably if not excitingly, prices are still inching upward, supply remains low and consumers are optimistic. The U.S. economy is under scrutiny but certainly not deteriorating.
Courtesy of San Francisco Association of Realtors