Two recent reports showed us some interesting trends in home prices.
A recent article from Axios highlighted the overall housing shortage for the nation. One of the fundamental drivers is the number of new housing starts feeding into the overall housing inventory. Basically, we need 1.5 million new home built in a year to break even. We only just cleared that hurdle last December. Before that, we haven’t had more than 1.5 million homes built since 2006.
As we know from basic economics, a decrease in supply means an increase in price and that’s what’s been happening!
Overall, the prices of entry level homes have increased 50% since 2012, and homes in the move up category have increased 38%. Some localized regions of the country have seen increases well over 70%.
The source data from AEI shows that overall house prices have gone up 3.4% in just the last year.
What does this mean for you? Now is a good time to sell. For example, a home purchased for $200,000 a year ago is now worth $206,800. A starter home purchased for $125,000 in 2012 is now worth $250,000.
Of course, these are nationwide averages. There are local variations everywhere. If you’d like to know what your specific house is worth today, please give us a call or a text!
References:
AXIOS Report: https://www.axios.com/us-housing-shortage-crisis-prices-17eba84d-6ad4-4860-9fa1-34b00b22e08f.html
AEI Report: https://www.aei.org/national-and-metro-housing-market-indicators/