New residential real estate activity has been relatively slow in the first quarter of 2018, yet housing is proving its resiliency in a consistently improving economy. Some markets have had increases in signed contracts, but the vast majority of the nation continues to experience fewer closed sales and lower inventory compared to last year at this time. Despite there being fewer homes for sale, buyer demand has remained strong enough to keep prices on the rise, which should continue for the foreseeable future. New Listings were down 24.9 percent for single family homes and 15.5 percent for Condo/TIC/Coop properties. Pending Sales increased 1.4 percent for single family homes and 7.2 percent for Condo/TIC/Coop properties. The Median Sales Price was up 25.0 percent to $1,687,500 for single family homes and 9.9 percent to $1,250,000 for Condo/TIC/Coop properties. Months Supply of Inventory decreased 28.6 percent for single family units and 29.6 percent for Condo/TIC/Coop units. The Federal Reserve raised its key short-term interest rate by .25 percent in March, citing concerns about inflation. It is the sixth rate increase by the Fed since December 2015, and at least two more rate increases are expected this year. Borrowing money will be more expensive, particularly for home equity loans, credit cards and adjustable rate mortgages, but rising wages and a low national unemployment rate that has been at 4.1 percent for five months in a row would seem to indicate that we are prepared for this. And although mortgage rates have risen to their highest point in four years, they have been quite low for several years.
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Courtesy of San Francisco Association of REALTORS®
