House prices are still going up!
“The interest rate has gone up, but why do house prices keep going up?”
This is a question I hear a lot from buyers. Yes, house prices are still rising.
According to statistics, compared to the third week of last March, the average house price in the third week of March this year increased by 6.3%. The median was $425.500, which is said to be the highest median ever except for the six months of 2022, when prices soared.
What's comforting, at least for buyers, is that house price growth is in the single digits. It rose to double digits the year before last and the year before last, which is fortunate. The biggest reason the industry sees is that the rate of increase in house prices has decreased due to a decrease in demand due to a rise in interest rates. However, the pace is so slow that it still creates a lucrative market for sellers.
So why are prices still rising?
As I always say, there is no market where the law of supply and demand is applied as purely as real estate. In other words, the reason house prices are rising right now is because supply far outpaces demand. Yes, there are not enough houses. First of all, the volume of new listings is much smaller. Compared to the third week of March last year, the number of new listings in the third week of March this year is reported to have decreased by about 20%. This amount is said to be at the level of April 2020, when the corona just started and people stopped all actions.
Fortunately, the total number of listings increased by 57% from last year. The problem is that most of these 57% of homes are older homes on the market. In other words, when house prices rose to double digits last year and the year before last, they tried to sell their houses for that special opportunity, but it is the inventory that was created by the accumulation of houses that could not be sold. Still, these houses are gradually going down in price, so it may be a good opportunity for buyers in the end.
Currently, it is still advantageous for sellers, but at this rate, the moment will come when house prices will eventually rise. Prices may have gone down in some regions. So if you are planning to sell your home, consider getting it on the market quickly at an attractive price and selling while the market is still in favor of the seller.
See you next time with a fun and helpful article.