The National Case-Shiller Home Price Index Report was released last week. This is widely considered the “gold standard” or the industry’s leading measure for home price appreciation. The report indicated that home prices fell by 1.07% in August. Year over year, home prices increased by 13% which was a decline from the previous reading of 15.6% in July. Even though the national index did show a month-over-month decline, this was mostly due to declines in some of the larger cities such as San Francisco (-4.3%), Seattle (-3.9%), San Diego (-2.8%), LA (-2.3%), and Denver (-2.3%). When you remove these cities, however, most markets were relatively unchanged or flat.
This report clearly shows that home prices are cooling, but year over year home prices are still strong. Household formations are at their highest level on record with strong demand. When homes are priced correctly, homes are still selling at a rapid pace. In the Existing Home Sales Report, the average time a home sat on the market for the month of September was 19 days and 70% of homes were on the market for less than 30 days.
When looking at this dynamic considering record high levels of demand and extremely tight levels of inventory, the current housing environment is supportive of home pricing.
Source: https://bit.ly/3DzAmLh
By: Jon Iacono