Case-Shiller’s recent Dec.2014 report shows home prices inching even further skyward, with an increase of 7.5 percent year-over-year, topping the national average of 4.5 percent by a healthy margin. Shrinking inventory is to blame, but one must wonder if supply will ever catch up at this rate.
“As long as we have a tight sellers’ market, it’s going to be in that area,” said Dr. James Gaines, an economist at the Real Estate Center at Texas A&M University in this story by Steve Brown. “The good news is it’s not 12 or 15 percent.
“We can live with this for a while.”
But really, can we?
“Movements in home prices show clear regional patterns,” said S&P’s David Blitzer in this report. “The western half of the nation plus Miami and Atlanta enjoyed year-over-year increases of 5 percent or more.
“San Francisco and Miami were the strongest,” he said. “Dallas, Denver, Las Vegas and Atlanta also experienced solid gains.”
But how long can home prices continue to increase? In some areas of Dallas, homes are sitting on the market for more than the typical 60 days. In other areas, you have to beat back competition with a stick. Still, though, some areas of the luxury market are experiencing softness, especially in the $1 million range. However, the $300,000 to $600,000 ranges are white hot.
What do you predict for 2015? Will more potential homebuyers turn to leasing as inventory continues to remain tight? And will higher prices keep Millennials from the market? Will this have a substantial impact on first-time homebuyers?