Altos Research just published the report below indicating that home prices will be remaining high throughout the summer nationwide. This also goes for Las Vegas and Henderson. Our inventory here is low and more people are relocating to the valley.
Key points this week:
New listings ticked up this week, to 70,284 nationwide.
Total inventory fell to only 705,672 homes for sale – another record low.
Home price reductions are at record lows right now too.
This is your Altos Research data for Monday June 8 2020, with the latest real estate analytics that came in over the weekend for the whole US. The top line for today is the same as it has been for several weeks now. Available inventory for sale is at its lowest level ever, and week over week prices keep climbing so residential real estate prices are at record highs.
What’s more interesting is that we thought we’d look at the data that has convinced us that US Home Prices will stay elevated through July and August. There is no short term market crash coming. We’ll look at the Altos leading indicators that give us that foresight.
Median home price in the US right now is $349,000 up 2.6% year over year. End of June is the seasonal peak in pricing, so while prices don’t need to keep climbing for us to keep increases the year over year gains.
New Listings Price is $317,000, down a tick from last week and perfectly healthy for this time of year.
Inventory fell again this week to only 705,000 homes on the market nationwide. New listings climbed to 70,000 which is good, but “normal” would be 80-90,000, so we have a long way to go to get supply.
And really it’s that shortage of supply that feeds the leading indicators. Here’s two: Home price reductions are at record lows right now. If a home is on the market now, and demand is weak, those sellers and their agents get motivated to take a listing price reduction. When they have demand, buyers and are seeing the deals around them get done quickly they do not. House on the market now, takes a price cut, gets an offer in July, closes in August and you start seeing that data typically in September. So Price Reductions is a powerful leading indicator for where transaction prices will be in in 60-90-120 days. Price reductions are very bullish right now.
The bottom chart here is a proprietary Altos Research measure, our Market Action Index. This is for at-a-glance reading “how’s the market”. I’ve highlighted the red line here so you can see how the MAI dove with demand in March. Since supply is record tight and demand keeps chugging along, The Market Action Index is also very bullish for pricing for the rest of the summer.
Since there are no signs of distress sales, and the current legislative environment feels like we’re unlikely to see any in any real quantities quickly. There are laws in the works in California and other places that might move to a judicial foreclosure process which can mean foreclosures could take years to happen. It’s looking less and less likely that we’ll see any kind of supply surge this year. Prices, and valuations, however will stay high.
Report courtesy of Altos Research