US house prices have had their ups and downs
Apr 25, 2023
US house prices have had their ups and downs Houston
By   Evan Wyloge
  • City News
  • US house prices
  • property market
  • house prices
Abstract: These days many people are reeling from the much-feared housing recession - a fear that descended like a dark cloud last year as the housing market appeared to have crippled.

Now it seems that the housing bubble is not about to burst. To be sure, after a rapid rise in mortgage rates from a trough below 3% to a 20-year high in late 2022, the housing market has slowed, briefly exceeding 7% before falling back into the 6% range. However, house prices are still rising in most parts of the country, while a few areas are falling.

 

To set the record straight, and perhaps to quell the understandable urge to clutch pearls, we looked at price changes over the past year in the 250 largest metropolitan areas in the US (85% of the country's population) to see how these numbers have affected home values.

 

In March, the median list price of a home in the US was $424,495, about 6% higher than the $399,450 a year earlier in March 2022. In terms of price per square foot (considered a more accurate measure of price change), the year-over-year increase was about 3 per cent.

 

"Some are predicting a much bigger drop in prices," said Danielle Hale, chief economist at Realtor.com®." Our forecast is on the more optimistic side. We're expecting a little bit more stickiness in prices and a little bit more resistance to price declines, so I think for the general conversation about real estate, that might surprise people a little bit."

 US house prices have had their ups and downs

There are around 15% fewer new listings in March 2023 than in March 2022. This reflects the pessimism in the housing market: sellers are worried they won't get the price they want and are reluctant to give up the ultra-low mortgage rates they received during the COVID-19 pandemic when buying a new home.

 

To see how home prices have risen and fallen by country, we used publicly available data on Realtor.com to compare the median home listing price in March to a year ago. We found that home prices fell in only 1 in 5 cities. (Metros include major cities and surrounding towns, suburbs and smaller urban areas).

 

Across the US, particularly concentrated in historically affordable Midwestern and Southern housing markets, homes are listed at higher prices than they were last year. In some cases, well above.

 

Take a place like Omaha, Nevada, where the median listing price of a home reached $344,500 in March. That's up 80% from a year ago, when the median listing price was only $190,000. Also in Davenport, IA, the median listing price reached almost $220,000 in March. This is a 63% increase from a year ago when the median listing price was around $135,000.

 

Prices also rose sharply in places like Jackson, Tennessee, up 59 per cent year-over-year to $223,000 in March; Champaign, Illinois, up 53 per cent to about $257,000; and Fayetteville, North Carolina, up 44 per cent to $342,500.

 

"What we're seeing is that real estate is becoming more regional and more local," Hale said." People always say that, but for several years housing was almost a commodity and every owner saw an appreciation in value. Now we're seeing how the local economy is doing, how well the area is attracting new residents and how well builders can keep up with demand, and that's what really matters."


But prices are falling in areas of the country that have historically been more expensive, and in places that attracted large numbers of new residents and saw a spike in demand during the real estate pandemic era.

 

In Coeur d'Alene, Idaho, a popular resort area that has experienced an influx of new buyers over the past few years, the median price fell 27 per cent in March to $717,000, down from $988,000 a year ago. In Austin, Texas, prices fell by around 8% to around $550,000. In Bend, Oregon, the listing price was down about 6 per cent from a year ago to $678,000 and in Denver, the price was down about 1 per cent to $655,000.

 

"There is still room for home price growth in the Midwest," Hale said.

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US house prices have had their ups and downs
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