Local home prices rise 6.6% since last spring

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Having ticked up an upwardly revised 1.1 percent in March, the S&P CoreLogic Case-Shiller Index for single-family home values within the San Francisco Metropolitan Area - which includes the East Bay, North Bay and Peninsula - gained another 1.5 percent in April and the index for area condos gained 1.8 percent as well, lifting each index to new all-time highs.

The Index's 10-city composite rose 4.9 percent for the year, while the 20-city composite increased 5.7 percent.

Among the major metro markets, seven cities reported greater price increases in the year ending April versus the year ending March.

Prices rose the fastest in Seattle this past April (up 12.9 percent annually), Portland (9.3 percent) and Dallas (8.4 percent).

Delving into details, out of 20 cities covered in the report, 15 recorded positive monthly home price growth. On a non-seasonally adjusted basis, prices increased 0.9 percent from March. Eighteen of 20 cities tracked in this study reported increases in April before the seasonal adjustment, but only 13 saw increases after the seasonal adjustment.

"Since demand is exceeding supply and financing is available, there is nothing right now to keep prices from going up", Blitzer said.

"At the same time, the supply of homes for sale has barely kept pace with demand, and the inventory of new or existing homes for sale shrunk down to only a four-month supply", he added.

With mortgage rates hovering at about 4 percent and high-paying tech jobs that make for a comfortable house-hunting budget, it's not hard to see why Seattle's housing market has become so competitive.

"For the moment, conditions appear favorable for avoiding another crash", he said.

"The question is not if home prices can climb without any limit; they can't", Blitzer said. Housing starts are increasing, foreclosure levels are low and household debt levels are manageable. "While prices can not rise indefinitely, there is no way to tell when rising prices and mortgage rates will force a slowdown in housing". Household finances should be able to weather a fairly large price drop. And many single-family homes were converted to rentals after the housing bust and are likely to remain off the for-sale market. That's 22.2 percent fewer homes than were on the market in April of a year ago.

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