HOUSTON – (By Dale King, Realty News Report) — Home prices continued to soar across the nation in June, says a major real estate report. Texas metros all followed that upward path, with Austin prices surging an amazing 29.9 percent since June of 2020.
Texas Triangle Posts Huge Gains
The just-released CoreLogic Home Price Index (HPI) and HPI Forecast for June 2021 says the cost of purchasing a home in Fort Worth rose 14.6 percent year-over-year. Dwellings in Dallas took a similar skyward trek of 13.4 percent while home prices in San Antonio shot up 12.4. percent.
Houston found itself pulling up the rear among Texas metros with a 9.7 percent price increase, which is really nothing to be ashamed of. But the CoreLogic analysis says Space City faces some internal pressures that could slice into that hike. They could even force a slight dip in the price of homes in Houston during the coming 12 months.
Although it should be noted that June, with a total of 13.090 property sales, Houston recorded the highest monthly sales total in the Houston real estate history, according to the Houston Association of Realtors.
Despite economic peaks and valleys brought on by the pandemic, the housing market is still going strong. Nationally, said the HPI, home prices increased an average of 17.2 percent in June 2021. The increase itself was up from the June 2020 gain of 4. percent and was the highest year-over-year hike since 1979.
“The increase in home prices was fueled by low mortgage rates, low for-sale supply and a rebounding economy,” noted CoreLogic. “Projected increases in number of homes on the market along with moderation in demand as prices soar out of reach for some buyers could slow home price gains over the next 12 months.”
Then, There’s The Affordability Question
“Metro areas where affordability constraints are prevalent continue to persist as prices rise. For instance, in June, the cost of purchasing homes in San Diego increased 22.4 percent year-over-year and are forecast to rise an additional 11.5 percent over the next 12 months.
“Conversely, the HPI Forecast also reveals the continued disparity in home price growth across metros. In markets like Houston, which was hit hard by the collapse of the oil industry and bears scars from hurricane seasons past, home prices are expected to decline 0.9 percent by June 2022.”
Actually, says CoreLogic, “home price gains are projected to slow to a 3.2% increase by June 2022, as ongoing affordability challenges deter some potential buyers and an uptick in new for-sale listings cause a slowdown in home price growth.”
In the meantime, however, “assupply and demand pressures endure and construction costs spike, low mortgage rates, rising savings and an improving labor market are helping to keep homeownership within reach for many prospective buyers.”
“Home prices have been rising in the mid-single digits for some years now. The recent surge to double-digit price jumps reflect the convergence of exceptional demand and persistent low supply,” said Frank Martell, president and CEO of CoreLogic. “With plenty of cash on the sidelines, along with very low mortgage rates, prices are heading up and affordability will become a more acute issue for the foreseeable future.”
Five metropolitan areas are on the brink of a shaky price period, says the report. “The CoreLogic MRI predicts that metros such Springfield, Mass., is at the greatest risk (25-50%) of a decline in home prices over the next 12 months. Worcester, Mass., Chico, Calif., Oxnard-Thousand Oaks Ventura, Calif., and Norwich-New London, Conn. are also at risk, but at a lower percentage (less than 25%) for a decline over the next 12 months.”
Top Gainer: Twin Falls, Idaho, up 42 Percent
Some other takeaways from this month’s report are:
- Home prices rose sharply in the west with Twin Falls, Idaho, experiencing the highest year-over-year increase at 2percent. Bend, Oregon, ranked second with a year-over-year increase of 35.4%. (These figures are likely buoyed by former Californians fleeing the Golden State.)
- At the state level, Idaho and Arizona continued to have the strongest price growth at 34.2% and 26.1%, respectively. Montana also had a 24.3% year-over-year increase as home buyers seek out more affordable locations with lower population density and attractive outdoor amenities.
- In June, appreciation of detached properties (19.1%) was the highest measured since the inception of the index and nearly double that of attached properties (10.7%) as prospective buyers continue to seek more living space and lower density communities.
Nothaft: Biggest Price Spike On Record
“The pandemic sparked an increase in buyer demand for lower density neighborhoods and more living space — both inside and outside their home,” said Frank Nothaft, chief economist at CoreLogic. “Communities with single-family detached houses fill this need. Detached homes had the highest annual growth in June since the inception of the CoreLogic Home Price Index in 1976.”
Aug 9, 2021 Realty News Report Copyright 2021
Photo: Courtesy Arch-Con Corp.
For more about Texas real estate, check out the book Houston 2020: America’s Boom Town – An Extreme Close Up by Ralph Bivins. Available on Amazon http://tiny.cc/4a2g6y
Houston 2020 Ebook version https://tinyurl.com/4xm7z8b5
File: Austin Home Prices Up 30 Percent