US home prices soar at record pace in June

[Omaha Steve]

Source: AP

By CHRISTOPHER RUGABER

WASHINGTON (AP) — U.S. home prices jumped by a record amount in June as homebuyers competed for a limited supply of available houses, the latest evidence that the housing market remains red-hot.

The S&P CoreLogic Case-Shiller 20-city home price index soared 19.1% in June compared with a year earlier, the largest increase on records dating back to 2000. The annual price gains in June were higher in all 20 cities than they were in May. Prices are now at record highs in 19 of the 20 cities, with the exception of Chicago.

“The last several months have been extraordinary not only in the level of price gains, but in the consistency of gains across the country,” said Craig Lazzara, managing director of index investment strategy at S&P DJI.

There are signs that the high prices are cooling sales a bit. Sales of existing homes rose 1.5% in July from a year earlier, a separate report showed last week. That’s a much slower pace than the previous month. And the number of contracts signed to buy homes, a leading indicator of final sales, has fallen for two straight months.



FILE - In this June 24, 2021 file photo, a real estate sign is posted in front of a newly constructed single family home in Auburn, N.H. U.S. home prices jumped by a record amount in June as homebuyers competed for a limited supply of available houses, the latest evidence that the housing market remains red-hot. (AP Photo/Charles Krupa, File)


Read more: https://apnews.com/article/business-prices-home-prices-fc036f9c544b9de3e95ae032c38c673d

[twodogsbarking]

1. Never trust a realtor.

[NurseJackie]

2. 🙄

[totodeinhere]

5. I don't think that this crisis is the fault of realtors.

n/t

[twodogsbarking]

11. I don't either.

[Sedona]

9. Really?

I'm a highly ethical (& successful) licensed broker in three states.

Over half the (mostly occupied) inventory disappeared when Covid hit. Only a fraction has come back

How is a simple supply and demand issue the fault of Realtors?

Why are we not to be trusted?

I really want to know.

[twodogsbarking]

10. Never trust a realtor.

[Bayard]

3. My niece

My niece and her husband put offers in on 5 houses in Denver before they finally landed one.

[Ford_Prefect]

4. I will underscore that this was for JUNE and we are almost in September.

Sales and Prices have cooled here since June. Certain properties and price ranges are still "hot" but that is not for middle class housing. Upper and High end homes are getting built and selling well. Meanwhile no-one appears to be building entry level or mid-range housing of any kind. Rents are way up because of speculative pricing but reality says there isn't an economy to support the increases.

IMO the June report more suggests pent up demand and those trying to leave COVID or Weather extremes. Realty reports such as this get painted as indicators of an ongoing trend when they really are only a snapshot of a particular moment.

[Vinca]

6. This is a Covid bubble and it's going to burst. In 2007 - 2008 a similar thing occurred because

of the mortgage loan shenanigans going on and the ensuing economic collapse. People who resold after buying during this period have often taken significant hits. Best to stay put if you can and not buy until things drop again. (FYI - Appraiser with 40 years of experience in the family.)

[twodogsbarking]

13. You have stated it perfectly.

[Jimbo S]

16. Would it be advantageous

to sell and move into an apartment for a couple of years, waiting for the market to correct itself?

My condo has appreciated about 20% over the last 15 months. I don't think it's sustainable.

[Vinca]

17. It probably depends on where you are. I'd talk to someone locally and get their take.

You probably have to weigh the cost of renting where you live, too. If you can get find an appraiser who has 10 seconds of free time (hard to find these days), that's the best bet, but a trustworthy Realtor should level with you, too.

[BobTheSubgenius]

7. My neighbour across the street had owned his house for several years.

It was on a 9000 square foot lot, as are most of the houses on that side of the street. He bought the house next door, and was eventually able to subdivide the two lots into three 6000 square foot lots, which is the standard.

He's building three 2300 square foot houses, and the pre-completion ask is $1.6 million. He's quite fastidious about his builds, and finishes are above builder grade, but still...

[bucolic_frolic]

12. Did he tear down the other 2 houses?

I hear you on the price. Most people don't realize the fat profits they pay for houses. Builders can pocket 200k on the build, and the banks another 100k by the time the fees and decades of interest are paid off. Talk about hitching yourself to the wagon.

Even a fixer upper can generate 150k on the upgrade. Small old houses you'd say who would want to own it. They gut it, replace the windows, add a deck, central climate, new siding, grading, spiffed with all the pudding and extras. There are people who do this for a living, while they live in it. Even movie stars.

I guess I'm a piker. I go with upgrades on the fly, each a smart deployment of scarce capital. It keeps up the value, never allow deterioration to the point of financial collapse. But getting all the repairs up to date in a timely manner is a complex dance.

[BobTheSubgenius]

19. It IS a complex dance.

At the level of the resources of my wife and I, it's a race to get a few projects finished before the first ones need redoing.

There isn't the profit margin in this neighbouring project that you might expect. A building lot in an average neighbourhood will go for around $650,000, and building costs are such that, for a new build, you budget around $360 per square foot. He already owned one of them, and got a bargain on the other, a few years ago.

It's a pretty risky endeavour, at times, though.

PS. Yes, he demolished the two existing houses. Even that is a considerable cost, and about to get worse. The new code is going to require that one doesn't demolish a house, but disassemble it and either recycle or reuse all the components possible.

Every part of an existing house needs to be tested for asbestos, and appropriate abatement performed. For normal house containing asbestos, that is well north of $15-20,000 plus about $5000 for the testing. Even the rezoning took a year and $100,000+.

[bucolic_frolic]

8. Do you want to sell your home today? Quick cash, no fees, fair price, no repairs!

They buy for $200k below market price, put $40K into repairs, and flip it onto the market. They make as much as home builders.

DON'T DO IT! Seek alternative. Even a realtor is preferable.

[joetheman]

14. i really can't figure it out. They are made of shit material and have been thrown up in weeks. nt

[nitpicker]

15. South Arlington VA has been Amazoned

Apart from one 2 bed 1 1/2 Cape Cod and one townhouse. everything sold in that zipcode over the second quarter of 2021 got peddled for 800K or more. Up the street, a 3/3 house got sold for almost 1.1M.

[stamperman]

18. Im suspecting some greedy sellers.

In my area yes houses are going fast....HOWEVER, there are three houses just down the street that have not moved in what seems to be a relatively long time....Looked at the listing price...holy cow! No way I would pay what they wanted....For example one like mine they want 200K. Mine which is very similar, I got at 145K just four years ago.