According to Realtor.com, for four consecutive months, $250,000 was the median listing price in the U.S. which was the highest list price on record for November 2016, a whopping 9% more than November 2015.
So what is driving higher prices? Simply put, diminishing supply. The number of U.S. homes for sale in 2016 dropped 5% from October to November alone, 11% below November 2015. Homes listed in the $500,000 and lower price range are being gobbled up quicker than leftovers at Thanksgiving!
Not only are homes selling high, they’re selling fast. With the average time on the market just 82 days; November had one of the fastest churn rates ever.
What’s the hottest market in the U.S.? You may have guessed it – San Francisco. California cities hold 11 out of the top 20 spots.
Here are November 2016’s ten favored housing markets:
- San Francisco, California
- Dallas, Texas
- Vallejo, California
- Denver, Colorado
- San Jose, California
- San Diego, California
- Stockton, California
- Fort Wayne, Indiana
- Columbus, Ohio
- Detroit, Michigan
2017 is projected to start like a housing sling shot and could potentially break all records as the strongest home selling January on record. Luxury homes continue to be the only weak spot, with prices being stable or even dropping in many areas (more on that in my next post).
But what about the risk of a bursting bubble this upcoming year? Unless a catastrophic, unexpected event occurs, it won’t happen! Interest rates have risen but are still extremely low. Low down payment financing and interest rates make housing more affordable to first time home buyers. First time home buyers purchased 32% of all U.S. homes last year alone, and that percentage is only going to increase this year. A first time home buyer’s mortgage payment would be comparable to what many are paying monthly in rent, with an average asking price of $250,000. Many just need the down payment, which they have or are at least close to.
The bottom line? First time home buyers will drive the market this year. Existing home sellers (many with growing families) will be able to move up in price, thus creating a domino effect, a demand which pushes price increases.
Buckle up! 2017 is going to be fun.