Housing price bubble chatter has increased this summer, as market observers attempt to predict the next residential real estate shift. It is too early to predicta change from higher prices and lower inventory, but the common markersthat caused the last housing cooldown are present. Wages are up but not atthe same pace as home prices, leading to the kind of affordability concernsthat can cause fewer sales at lower prices. At the same time, demand is stilloutpacing what is available for sale in many markets.
Closed Sales decreased 6.5 percent for Detached homes and 12.5 percent forAttached homes. Pending Sales decreased 1.6 percent for Detached homesand 2.1 percent for Attached homes. Inventory increased 6.4 percent forDetached homes and 24.8 percent for Attached homes.The Median Sales Price was up 6.8 percent to $657,000 for Detached homesand 6.7 percent to $432,000 for Attached homes. Days on Market increased3.7 percent for Detached homes and 13.6 percent for Attached homes.Supply increased 13.0 percent for Detached homes and 31.3 percent forAttached homes.Consumer spending on home goods and renovations are up, and morepeople are entering the workforce.
Employed people spending money is goodfor the housing market. Meanwhile, GDP growth was 4.1% in the secondquarter, the strongest showing since 2014. Housing starts are down, but thatis more reflective of low supply than anything else. With a growing economy,solid lending practices and the potential for improved inventory from newlisting and building activity, market balance is more likely than a bubble.
(Provided by SDAR)