Rising US home prices fuel concerns about unsustainable market

Los Angeles /
Apr.April 25, 2017 11:30 AM

From TRD New York: 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, 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


Related Articles

arrow_forward_ios
Dara Mir (left) and Lilly Ghalichi (right) with daughter Alara; 10614 Chalon Road in Bel Air (Plus Real Estate Group, Instagram/lillyghalichi, iStock)
Rate hike likely factor as Shahs of Sunset star settles for $4M trim in Bel Air
Rate hike likely factor as Shahs of Sunset star settles for $4M trim in Bel Air
Nick Griffin with Downtown Center Business Improvement District (Connect Conferences,  Chuck Bennett)
170 projects in DTLA pipeline
170 projects in DTLA pipeline
UCLA's Jerry Nickelsburg (UCLA Anderson School of Management, iStock)
Uptick in homebuilding won’t bring enough supply to trim prices: UCLA Anderson survey
Uptick in homebuilding won’t bring enough supply to trim prices: UCLA Anderson survey
(iStock/Illustration by The Real Deal)
L.A. County signed contracts fall for 6th-straight month
L.A. County signed contracts fall for 6th-straight month
MAG Capital Partners' Andrew Gi with Charlmont Village townhomes, 1625 East G St.,, Ontario (Mag Capital Partners)
Texas investor pays $24M for 55 townhomes in Ontario
Texas investor pays $24M for 55 townhomes in Ontario
San Bernardino (iStock)
Median in San Bernardino County edges close to $500K
Median in San Bernardino County edges close to $500K
Reports Show OC Cities Are Crazy Expensive (iStock)
OC’s largest cities among priciest rental markets in U.S.
OC’s largest cities among priciest rental markets in U.S.
Sancerra's Marcus Cook and STG Capital Partners' Marshall Haines (iStock, USC Lusk, STG)
“Build-for-rent” community envisioned in Inland Empire
“Build-for-rent” community envisioned in Inland Empire
arrow_forward_ios

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

Loading...