Rising US home prices fuel concerns about unsustainable market

Prices have gone up twice as fast as incomes: report

New York /
Apr.April 25, 2017 12:20 PM

Home prices across the country are rising much faster than incomes, sparking concerns from economists and brokers that the market may overheat.

In February, home prices jumped nearly 6 percent from the month before, the Wall Street Journal reported, citing the S&P CoreLogic Case-Shiller U.S. National Home Price Index. That means prices are now nearly 40 percent higher than they were at the depth of the crash in February 2012. By comparison, incomes jumped just 3 percent in February from the month before, and 12 percent from February 2012, according to the newspaper.

Some parts of the country are seeing bidding wars, and some buyers are even skipping home inspections. The lack of construction, coupled with labor shortages and zoning regulations is pushing up prices, the Journal reported.

However, economists told the newspaper there is little indication the market is headed for a crash. They said if markets do overheat, it will result in slightly diminished home prices or a stretch where prices stay flat. Most economists predict prices will continue to go up for a few more years, due to the ongoing supply glut.

The market “is not going to burst, it’s going to contract” with falling sales volume, Nela Richardson, chief economist at Redfin TRData LogoTINY, told the newspaper. “You might still see what looks to be a robust market because prices are really strong, but that doesn’t mean it’s a broad market,” Richardson said.

During the first quarter, Manhattan’s median apartment sale price was $1.1 million, a 3 percent decline from last year. [WSJ] Miriam Hall

(To view historical Manhattan condo sales, click here)


Related Articles

arrow_forward_ios
The median existing-home price exceeded $300,000 for the first time last year (iStock)
Vicious cycle creates “huge supply crunch,” pushing home prices up
Vicious cycle creates “huge supply crunch,” pushing home prices up
(iStock)
Want a home in Greenwich? Data says you’d better hurry
Want a home in Greenwich? Data says you’d better hurry
Overall, the number of housing units that started construction last year was up 7 percent from 2019. (iStock)
Residential construction had busiest year since 2006: MBA
Residential construction had busiest year since 2006: MBA
Common Projects sneaker designer Peter Poopat bought the home in December. (Getty, Brown Harris Stevens)
$6.5M Fort Greene townhouse sale breaks neighborhood record
$6.5M Fort Greene townhouse sale breaks neighborhood record
(iStock)
Homebuilder sentiment falls for second month in a row
Homebuilder sentiment falls for second month in a row
(iStock)
Homebuying up again, but rising mortgage rates depress refinancing
Homebuying up again, but rising mortgage rates depress refinancing
The two most expensive contracts signed last week were condos at One Prospect Park West. (Douglas Elliman)
Brooklyn luxury market roars back to life
Brooklyn luxury market roars back to life
Fidelity’s Raymond Quirk (iStock)
Title insurers launch new closing tools as homebuying rises
Title insurers launch new closing tools as homebuying rises
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...