According to the S&P Corelogic Case-Shiller national price index, which measures housing prices across the country, January 2021’s home prices were 11.2% higher than they were in January 2020; this represents the largest increase in a decade-and-a-half. Moreover, prices increased, when compared to January 2020, in 19 out of the 20 large cities tracked by the Case-Shiller index, Cleveland, Ohio was the only major city where prices decreased. The largest price increases were seen in Phoenix, Arizona (15.8%); Seattle, Washington, and San Diego, California. Similarly, the Federal Housing Finance Agency (“FHFA”) reported a 12% increase in home prices between January 2020 and January 2021. Notably, home prices had only increased by 1% between December 2020 and January 2021, indicating that price increase may be slowing.
As we have mentioned numerous times, the COVID-19 pandemic created the perfect storm for home prices to surge; supply decreased drastically, while demand for larger homes skyrocketed. Many analysts expect the surge to slow down as we enter Spring, COVID-19 fears wane; and people seize the opportunity to sell in a strong market; more sellers will place their homes on the market, lured by the staggering sums they can demand for their property. As more homes come on the market, housing prices will be driven down. Additionally, mortgage rates are rising, which operates as a cap on what most people will be able to afford.
While the housing market surprised everyone with its resilience, it appears that the rampant growth in the market will slow as COVID-19 concerns dissipate, more homes enter the market, and mortgage rates increase. If you are considering selling your home for maximum value, your time is running out.
At the Chernov Team we understand that knowledge is power, and knowledge of when its most opportune to sell is powerful knowledge indeed. At the Chernov Team we know that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.