Home prices see highest increase since 2007
Prices increase by about 17%
Home sellers in March sold their homes for an average 17% gain, or $30,500 more than the purchase price, making it the highest average monthly price gain for home sellers since December of 2007, according to RealtyTrac’s March and Q1 U.S. Home Sales report.
Of the nation’s 125 metropolitan areas with at least 300 sales in March, the largest gains occurred in San Francisco with a 72% gain. This was followed by San Jose, California with gains of 60%, Boulder, Colorado with 53%, Prescott, Arizona with 51% and Los Angeles 48%.
Although home sellers may be rejoicing at these increases, in some markets, the increasing home prices are actually stalling the market. In California, increased home prices have caused a slower start to the Spring homebuying season, with a decrease of 4.7% in home sales from March 2015.
“Home sellers in many markets are now seeing average price gains close to or above what home sellers experienced during the last housing boom,” RealtyTrac senior vice president Daren Blomquist said. “That should encourage more homeowners to take advantage of the prime seller’s market and list their homes for sale this year.”
“Banks are already taking advantage of that market as evidenced by the uptick in the distressed sales share over the last two quarters,” Blomquist said.
He cited increasing home prices as the culprit to the faltering home price appreciation occurring in some markets.
“Given that bank-owned homes are selling at a median price that is 40% below the overall median sales price nationwide, the uptick in distressed sales combined with affordability constraints are contributing to faltering home price appreciation in some markets, most notably the bellwether markets of Washington, D.C. and San Francisco,” Blomquist said.
On the other hand, home sellers sold their home for less than the purchase price. Among the markets that experienced a loss in the sale price versus purchase price were Rockford, Illinois with a 11% loss, Winston-Salem, North Carolina with a 10% loss, Cleveland Ohio with an 8% loss, Columbia, South Carolina with a 7% loss and Wilmington, North Carolina with a 5% loss.
About 36% of markets reached all-time price peaks in the past 15 months. The seven markets that reached new price peaks in March 2016 were Boulder, Colorado; Denver; Portland; Fort Collins, Colorado; Austin, Texas; Greeley, Colorado and Cincinnati, Ohio.
A total of 17% of markets had annual declines in home prices.