Home prices in Seattle, Las Vegas, and San Francisco posted the highest annual gains among the 20 cities, rising 12.9 percent, 11.1 percent and 10.2 percent, respectively.
The continuing inventory pinch helped boost the U.S. national Case Shiller Index® 6.2 percent in January from a year earlier, down from a 6.3 percent gain in December. Case-Shiller’s 10-City Composite rose 6 percent, while the 20-City Composite climbed 6.4 percent year-over-year.
Twelve of the 20 cities reported greater price increases in the year ending January 2018 versus the year ending December 2017. Home prices in Seattle, Las Vegas, and San Francisco posted the highest annual gains among the 20 cities, rising 12.9 percent, 11.1 percent and 10.2 percent, respectively.
Spring home shopping season will be in full swing soon, and with it we can expect the usual seasonal bump of would-be home buyers competing over a shrinking pool of homes. But in a twist, this year’s buyers may be competing against some buyers who have been unsuccessful in recent months.
Increasingly, the traditional seasonal boundaries around home shopping season – which generally heats up in early spring and cools off by late summer, in time for back-to-school season – are becoming less pronounced.
Limited supply, fierce competition and rising prices are forcing many buyers to stay on the market longer in hopes of finding the right home at the right price. More inventory is really the only cure for those pressures right now, especially for people at the entry-level end of the market, but it has proven frustratingly slow in coming.
Existing homeowners may be reluctant to list their homes for sale, fearful of joining the ranks of frenzied buyers themselves and/or perhaps increasingly unwilling to let go of a home financed with a loan at an interest rate lower than that offered today. While the number of newly built homes for sale is up somewhat, recently cracking the 300,000 threshold for the first time since 2009, rising land, labor and materials costs are forcing builders to price their homes potentially beyond the reach of many first-time and lower-income buyers.
Right now, the market can barely absorb what current demand there is. It remains to be seen how it adapts to even more buyers, and presumably less inventory, in the months to come.
Zillow predicts the February S&P/Case-Shiller U.S. national index, to be released April 24, will climb 6 percent year-over year.
Note: Case-Shiller and Case-Shiller Index are registered trademarks of CoreLogic Solutions, LLC. The statements herein are not endorsed by or provided in association or connection with CoreLogic, LLC.
