by Joe Rosengarten
After the monumental housing crash of 2008, the U.S. real estate market is once again witnessing record breaking performance. Data from April shows that single-family properties experienced a 5% annual rise for the sixth consecutive month. The rise points to the current solidity being seen in the economy and suggests that, despite the slowdown in job growth last month, the economic outlook is positive.
Denver, Seattle and Portland experienced the biggest price increases amongst S&P Case Shiller's 20-city index, although all three cities show signs of entering a period in which growth may slow down. Property prices in Denver rose 9.5%, Seattle saw a 10.7% rise and Portland’s single-family home prices are 12.3% higher than 12 months ago. The largest month-over-month gain was seen in Detroit (1%) and only San Diego, San Francisco and Cleveland reported declines from March.
These price increases are inevitably making affordability a hot topic of conversation in many of the country’s markets. The median price of an existing home sold in May hit a record $239,700, according to the National Association of Realtors, which began tracking prices in 1968. In April, eight cities - Portland, Ore., Denver, Boston, Dallas, San Francisco, Seattle and Charlotte - all set new single-home price records. As a result, Standard & Poor’s/Case-Shiller U.S. National Home Price Index 20-city index is up an impressive 39.2% from its low of March 2012.
But with Britain’s decision to leave the European Union and the upcoming U.S. elections each having unpredictable impacts on the global economy, certainty is definitely not a word that should be associated with the country’s real estate industry. Although growth is strong right now, there may be some bumps in the road over the coming months.