The trend for home prices in the first quarter of 2020? Up, according to the National Association of REALTORS® latest quarterly report, which found that metro home prices increased in nearly all (96 percent) metro areas. Out of 181 metropolitan statistical areas, 174 saw price gains, an increase from the 94 percent reported in the fourth quarter of 2019.
“The first quarter price jumps mostly reflect conditions prior to the coronavirus outbreak and show the strength of the housing demand prior to the pandemic,” said Lawrence Yun, NAR chief economist. “Even now, due to very limited listings, home prices are showing no signs of buckling.”
The increased prices occurred primarily in the West and South—including Boise City, Ida. (18.1 percent), Eugene, Ore. (14.5 percent) and Colorado Springs, Colo. (14.4 percent)—where growth was in the double digits. However, it’s not all good news. Even metro areas in which buyers are already priced out are experiencing fast growth. The most expensive metro areas include San Jose, Calif. (10.7 percent increase); San Francisco, Calif. (5.9 percent increase); Anaheim, Calif. (9.4 percent increase); San Diego, Calif. (8.1 percent increase); Boulder, Colo. (3.1 percent increase; Los Angeles, Calif. (8.1 percent increase); and Seattle, Wash. (11.5 percent increase).
“The fast-rising home prices are not healthy, so more homebuilding needs to take place as the economy begins to reopen,” said Yun. “Mortgage rates are at historic lows and those with secure employment will be attracted to the market.”
Existing homes inventory at the end of the first quarter was 1.5 million, 10.2 percent lower than the same time last year.
“Supply is extremely limited, and there are simply not as many homes for sale to meet the demand among potential buyers,” added Yun. “More supply and more listings are needed to provide a faster recovery for the economy.”
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