Springtime invites many new home buyers into the market. However, this year seems to be taking a slow start due to higher prices. This is mainly hitting high economy areas, like California and other western states and cities and is part of a trend we've seen over the last five months. There are also too many homes and not enough buyers which has made homes more expensive.
Danielle Hale, the chief economist for realtor.com, says "Sales have slowed. ... Affordability is a challenge." This is mostly because of a long-term housing shortage that pushed prices higher, on a monthly and yearly basis. "It suggests that the housing market is starting on a cooler footing this spring than last spring." In February of 2018, there were six percent fewer homes available on the market than there were February of this year.
However, this massive difference can be seen mainly in large, pricey areas on the west coast. The nations most expensive housing market is in Silicon Valley's San Jose, California. The market witnessed a 125 percent jump in the metro area in February compared to a year earlier. The average home price is hitting a massive 1.08 million dollars, and that is down ten percent from last year.
Hale chimed in with, "Prices are so high there that even with a high-paying job, it's difficult to afford homes. ... Builders are definitely trying to build in that area. Buyers are being a bit more hesitant [to purchase properties] while existing residents who are thinking about downsizing or retiring or moving somewhere else think now is a good time to put their home on the market, while home prices are still high." So, for those who have the money, they have a lot of options.
A few other places that have seen an uproar in houses available is Seattle at 85 percent, San Francisco at 53 percent, San Diego at 39 percent, and Portland, Oregon, at 36 percent. Overall, the most amount of options for buyers is on the pricey end. The number of homes priced at 750 thousand dollars saw an 11 percent increase from last year. This is because cheaper properties are in demand, so they sell quicker. There also are not as many home buyers with big enough pockets to snatch up these expensive homes.
Unfortunately for sellers, they have been forced to lower their expectations and their asking price. The prices of homes had a solid run after the bounce back from the recession; however, this caught up to rising mortgage rates and boosted buyers' costs to a point where people were pulled out of markets. Again, the western region of the U.S. has seen the highest rates starting with Las Vegas at 12 percent, San Jose with 9 percent, Phoenix with 7 percent, San Francisco with 5 percent, and Dallas with 4 percent.
Fortunately for you, Here at SETCO, we plan on making sure you get your future home with the best available price out there. We want you to be happy when you look at the prices for your first, or next home. Our closing professionals will guide you through the whole process, beginning to end.