According to the report, home prices are now up 19.5% year-over-year on average.
The largest growth was seen in the South, where prices are up 6% on average this quarter. Also this quarter properties in the West appreciated by 5.8%; the Midwest appreciated by 4.8%; and the Northeast grew by 3.9%
The highest performing major metropolitan area tracked by the report was Phoenix, where the average home price went up by 10.6% since last quarter and now stands at a 56.8% increase year-over-year. Tampa, Florida saw similar growth as homes values went up 10% for a 31.1% increase since last year. Coming in third, Las Vegas saw quarterly growth increase by 8.9% or 25.5% over last year.
On the other side of the spectrum, Pittsburg, Pennsylvania was the only metro area to see a decline in housing prices last quarter. The average house there saw a 1.7% decrease, but property values are still up 10.2% year-over-year. The Philadelphia area (which includes Camden, New Jersey and Wilmington, Delaware) only registered a 0.2% increase, for a total increase of 15.4 since this time last year. Baltimore saw a 1.2% increase or 9.5% over last year.
While the residential real estate market has been experiencing torrid growth, the economy seems to be slowing down,” said Brent Nyitray. “The advance estimate for third quarter GDP came in at a disappointing 2% and the Chicago Fed National Activity Index turned negative in September, indicating the economy is growing below trend. The conventional wisdom was that the economy would accelerate into the end of the year; instead, the economy seems to be decelerating.”
“The pandemic certainly explains part of what is going on. However, the ubiquitous shortages are having an effect as well,” Nyitray continued. “Shortages of lumber, construction materials and skilled labor is keeping housing starts at 1959 levels. This is pushing up house prices as demand is insatiable.”
“The Great Resignation remains a mystery to most policy makers, and regardless of the reason for it, wages are probably going to increase. This sets the stage for the wage-price spiral, which is something we haven’t seen for a long time.”
