Home prices continue to escalate and potential buyers are finding themselves embroiled in bidding wars. The latest S&P Core-Logic Case-Shiller Home Price Index found prices rose 12% year-over-year in February. The 20-City composite rose 11.9%, compared with 11.1% in January, with 19 of 20 cities reporting price gains.
“The National Composite’s 12% gain is the highest recorded since February 2006, exactly 15 years ago, and lies comfortably in the top decile of historical performance,” said Craig Lazzara, managing director and global head of index investment strategy at S&P DJI. “February’s price gains in every city are above that city’s median level, and rank in the top quartile of all reports in 18 cities.”
Pricing increased the most in Phoenix at 17.4%, followed by San Diego up 17% and Seattle gaining 15.4%. Home prices rose by double digits in all regions and were strongest in the West (+13%) and Southwest (+12.9%).
“These data remain consistent with the hypothesis that COVID has encouraged potential buyers to move from urban apartments to suburban homes. This demand may represent buyers who accelerated purchases that would have happened anyway over the next several years,” said Lazzara. “Alternatively, there may have been a secular change in preferences, leading to a permanent shift in the demand curve for housing. Future data will be required to analyze this question.”
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