Housing price bubble chatter has increased this summer, as market observers attempt to predict the next residential real estate shift. It is too early to predict a change from higher prices and lower inventory, but the common markers that caused the last housing cool-down are present. Wages are up but not at the same pace as home prices, leading to the kind of affordability concerns that can cause fewer sales at lower prices. At the same time, demand is still outpacing what is available for sale in many markets.
New Listings were down 14.2 percent for single family homes and 32.8 percent for Condo/TIC/Coop properties. Pending Sales decreased 6.3 percent for single family homes but increased 13.4 percent for Condo/TIC/Coop properties.
The Median Sales Price was up 17.9 percent to $1,650,000 for single family homes and 1.4 percent to $1,166,666 for Condo/TIC/Coop properties. Months Supply of Inventory decreased 18.2 percent for single family units and 26.9 percent for Condo/TIC/Coop units.
Consumer spending on home goods and renovations are up, and more people are entering the workforce. Employed people spending money is good for the housing market. Meanwhile, GDP growth was 4.1% in the second quarter, the strongest showing since 2014. Housing starts are down, but that is more reflective of low supply than anything else. With a growing economy, solid lending practices and the potential for improved inventory from new listing and building activity, market balance is more likely than a bubble.
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Courtesy of San Francisco Association of REALTORS®
