The Case-Shiller index January reading signals a robust YoY increase in residential real estate prices.
Yieldstreet’s residential real estate specialist Tejas Joshi pointed to low supply as the main driver of residential home price upside this past January. According to Joshi, the mismatch between demand and supply appears to be offsetting an increase in mortgage rates, at least for the time being.
The health of the market is confirmed by the March survey of realtors – 63% of the interviewed agents remain optimistic about the next six months and expect good housing market conditions.
According to the realtors that contributed to the March survey, “there are fewer desirable homes for sale this year than last year… It is a seller’s market, but not if that seller needs to find a new place to live.” Another market participant noted that “Prices are way too high especially for first-time home buyers. My buyers can’t compete in multiple-offer situations, which happens 99% of the time or greater. Too many cash buyers out there giving full appraisal waivers!”
There are contrarian voices, however, pointing to rising interest rates, inflation, and home prices, as well as geopolitical risk as factors that can potentially scare buyers going forward.
For now, however, frantic competition for limited inventory appears to be driving home prices up and is helping to set new survey records. According to the above mentioned March survey, 95% of agents have pointed out that buyers are outnumbering sellers, unchanged from January’s record high, while 89% of agents noted home prices increased in February, up 4% month-over-month and a new survey record. In addition, 65% of transactions received multiple offers in February, another survey record and a 5% increase since January. Cash purchases accounted for 22% of February sales, also setting a new survey record.
1. According to John Burns Real Estate Consulting. More information can be found at https://www.realestateconsulting.com/
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