Nearly every metro area tracked by the National Association of Realtors (NAR) — 99 percent — recorded year-over-year price increases in the first quarter of 2021, according to the latest quarterly report released by NAR.
The 11 metro areas with the highest price increases saw median sales prices ranging from the $100,000s to $600,000s. Those cities include: Kingston, New York (35.5 percent; $303,100); Bridgeport-Stamford-Norwalk, Connecticut (34.3 percent; $580,400); Atlantic City-Hammonton, New Jersey (34.0 percent; $277,200); Barnstable Town, Massachusetts (33.1 percent; $567,600); Boise City-Nampa, Idaho (32.8 percent; $422,600); Sherman-Denison, Texas (29.8 percent; $234,800); Elmira, New York (29.1 percent; $126,900); Austin-Round Rock, Texas (28.2 percent; $437,900); Youngstown-Warren-Boardman, Ohio-Pennsylvania (27.7 percent; $119,500); Decatur, Illinois (27.5 percent; $102,400); and Glens Falls, New York (27.5 percent; $214,600).
Some of the changes in median-home price, especially in small cities, were dependent on the type of homes sold during Q1 2021; not all homes saw large appreciations in price.
“Significant price increases throughout the country simply illustrate strong demand and record-low housing supply,” said Lawrence Yun, NAR chief economist. “The record-high home prices are happening across nearly all markets, big and small, even in those metros that have long been considered off-the-radar in prior years for many home seekers.”
The overwhelmingly majority of metros experienced strong price increases, with 89 percent (163 metro areas out of 183) registering double-digit price growth. For comparison, 25 percent of metro areas (46 out of 181) saw such growth in 2020’s first quarter when housing inventory was at a healthier level of 3.3 months, which better matched the pace of monthly demand.
Although home sellers have benefited from sharp price jumps, the situation has of course presented challenges for buyers.
“The sudden price appreciation is impacting affordability, especially among first-time home buyers,” said Yun. “With low inventory already impacting the market, added skyrocketing costs have left many families facing the reality of being priced out entirely.”
The most expensive markets also continued to experience double-digit price growth. Those metros include San Jose-Sunnyvale-Santa Clara, California ($1.5 million; 11.1 percent); San Francisco-Oakland-Hayward, California ($1.2 million; 21.8 percent); Anaheim-Santa Ana-Irvine, California ($1.0 million; 14.3 percent); Urban Honolulu, Hawaii ($940,400; 19.2 percent); San Diego-Carlsbad, California ($763,500; 14.0 percent); Boulder, Colorado ($726,600; 16.7 percent); Los Angeles-Long Beach-Glendale, California ($682,400; 15.1 percent); Seattle-Tacoma-Bellevue, Washington ($653,400; 17.9 percent); Naples-Immokalee-Marco Island, Florida ($599,500; 24.9 percent); and Nassau County-Suffolk County, New York ($598,600; 22.7 percent).
Nationally, the median existing-home sales price rose 16.2 percent on a year-over-year basis to $319,200, a record high since 1989. All regions recorded double-digit year-over-year price growth, with the Northeast seeing a 22.1 percent increase, followed by the West (18.0 percent), South (15.0 percent) and Midwest (14.4 percent).
“These higher home prices underscore the importance of stepping up housing supply,” he said. “An increase of inventory — either by new construction or by converting abandoned and unused retails or hotels — would combat the affordability problem.”
A new NAR report, the Case Studies on Repurposing Vacant Hotels/Motels into Multifamily Housing, examines the feasibility and benefits of these types of transformations.