Photo: David Sawyer/Flickr
With demand for housing high and supply falling below historic levels, US home prices rose to new highs in some markets in October.
Homes in more than half of the country’s largest markets are now worth more than they were before the Great Recession a decade ago, according to a report released last week by the listing site Zillow.
Nationally, median home prices rose 6.5 percent year-over-year to $203,400 in October, growing $12,500 from the same time last year.
Additionally, there were 11.7 percent fewer homes for sale in October compared to last year.
Over the last year, the most severe drops in inventory was recorded in the white-hot West Coast market of San Jose, CA (61.4 percent), followed by San Francisco, CA (32 percent) and San Diego, CA (31 percent).
And as inventory tightened dramatically in San Jose in October, median home prices rose 12.3 percent or $118,200 to $1 million from last year — the largest gain recorded nationwide, says Zillow.
“We are in the midst of an inventory crisis that shows no signs of waning, impacting potential buyers all across the country,” says Zillow Chief Economist Dr. Svenja Gudell in the report.
Home values are now rising at a historically fast pace, and they are forecasted to continue to escalate next year. This could dampen the plans of some first-time homebuyers who will need have to set aside even more money for a downpayment.
“Unfortunately, there’s just not enough homes for sale, and demand will continue to drive prices higher until we reach a better balance between supply and demand,” Gudell says in the report.
Click here to read the entire report.