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ArlingtonReal EstateRegional home values up 21% over past year

Regional home values up 21% over past year

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The Washington region saw year-over-year median home-sale prices rise just over 21 percent in the second quarter, slightly below the national increase in a market where affordability and inventory issues are leading to concerns about the future.

The median sales price of single-family homes in the first quarter was $571,500, according to data reported by the National Association of Realtors. That’s up from $472,100 a year before.

The local region was hardly alone: A total of 182 of 183 metro areas nationally showed increases in median sales prices, with nearly 95 percent of them posting double-digit gains.

The median sales price of single-family existing homes nationally rose 22.9 percent to $357,900, an increase of $66,800 from one year ago. All regions saw double-digit year-over-year price growth, led by the Northeast (21.8%), followed by the South (21%), West (20.9%), and Midwest (17.1%).

But for a number of reasons, the past may not be prologue, at least not over the rest of the year

“There are signs of more supply reaching the market and some tapering of demand,” said Lawrence Yun, chief economist for the National Association of Realtors. “The housing market looks to move from ‘super-hot’ to ‘warm’ with markedly slower price gains.”

That said, 12 metro areas did report price jumps of over 30 percent from one year ago, eight of which are in the South and West regions, including Pittsfield, Mass. (46.5%); Austin-Round Rock, Texas (45.1%); Naples-Immokalee-Marco Island, Fla. (41.9%); Boise City-Nampa, Idaho (41%); Barnstable, Mass. (37.8%); Boulder, Colo. (37.7%); Bridgeport-Stamford-Norwalk, Conn. (37.1%); Cape Coral-Fort Myers, Fla. (35.6%); Tucson, Ariz. (32.6%); New York-Jersey City-White Plains, N.Y.-N.J. (32.5%); San Francisco-Oakland-Hayward, Calif. (31.9%); and Punta Gorda, Fla. (30.8%).

Over the past three years, the typical price gain on an existing single-family home totaled $89,900, with price gains in all metro areas, and owners in 46 of them seeing price gains of $100,000 or more.

The largest price gains were in San Francisco ($315,000); San Jose ($294,000); Anaheim ($279,500); Barnstable ($220,600); and Boise ($206,300).

Those higher prices are great at selling time, but cause problems in the broader market.

“Housing affordability for first-time buyers is weakening,” Yun said.

“Unfortunately, the benefits of historically-low interest rates are overwhelmed by home prices rising too fast, thereby requiring a higher income in order to become a homeowner.”

In 17 metro areas, including the Washington region, a family needed more than $100,000 to affordably pay a 10-percent down-payment mortgage, up from 14 metro areas a quarter before. There were only 84 metro area markets in which a family needed less than $50,000 to afford a home, down from 104 markets in the first quarter of 2021. The most affordable markets are in the Rust Belt areas.

The National Association of Realtors is among housing trade groups that are urging political leaders to be helpful where they can, otherwise to try and stay out of the way.

“Supply will be critical in moderating the growing housing costs and rising rents,” Yun said. “Any disincentive to produce more housing inventory, such as extending the eviction moratorium, will only worsen the current shortage.”

Figures represent most, but not all, home sales during the period. Figures from 2021 are preliminary.

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