While recent data from the U.S. Census Bureau shows that household incomes rose strongly last year, home prices are still outpacing incomes in many metro areas because of the persistent shortage of new and existing homes for sale. Without more supply, the U.S. homeownership rate will remain near 50-year lows.
As outdoor temperatures slide into fall, the pressure is still up as an autumn housing heat wave is upon us at home in California. Buyers continue to swelter with the change of seasons as inventory shortages and staunch competition “could bring the hottest fall in a decade,” according to new data released from Realtor.com. These factors, combined with surging housing values, are forcing buyers into a particularly hot spot amidst a rapidly expanding affordability crisis.
According to Anand Nallathambi, President and CEO of CoreLogic, “Housing values continue to rise briskly on stronger fundamental and investor-fueled demand, as well as lack of adequate supply.” Home prices are forecasted to climb more like summer temps rather than drop during fall; chief economist Frank Nothaft predicts that prices will increase by 5% over the next year, forcing values up to a boiling point in 2017.
Even the temperate zone of San Francisco, where prices are moderating, somewhat “still holds the dubious distinction of being the only U.S. market considered overvalued” and where “homeownership is becoming increasingly difficult,” according to CNBC. But despite the broil for buyers, existing homeowners are finding relief from the heat simply by staying put. Jonathan Woloshin, executive director of UBS, a leading financial services company, asserts, “We have an affordability issue generally. California is our biggest problem.
There has been a complete decoupling between home price growth and median income growth.” So it’s no surprise that inventory data recently released from Realtor.com reports three of California’s major metropolitan areas – San Francisco, San Jose, and Vallejo – as top ranked for listings with the fewest number of days on the market. As the dog days of summer crawl into fall, any movement in the seller’s market has buyers lurching to find some shade. But with home sales moving faster and faster, it looks like this fall some buyers will be left to sweat it out.
But don’t be too discouraged! I believe in homeownership, and I want to do whatever I can to make that possible for you. Contact me at (619) 857-7191 and we’ll go over your options together.