The experts seem to have gotten it slightly wrong.
Weber, Davis and Salt Lake County real estate observers always expect a surge in activity when the spring buying season gets underway—an annual phenomenon that’s frequently accompanied by an uptick in prices paid. Because of optimism about the national economy and the ongoing nationwide shortage of homes for sale, a continuation of last year’s gradual rise in residential prices had been what the experts expected.
Last week, if CNBC’s Realty Check has it right, those predicted “gradual” price rises took an abrupt lurch upward. “Home prices just took the biggest jump in four years” was the headline, backed up by the new numbers: a surge in March’s U.S. median home prices of 8.9% compared with last year. Weber County homeowners who track national predictions as omens of Weber, Davis and Salt Lake County market trends expected half that increase. By CNBC’s reckoning, March constituted the biggest annual increase in four years.
The reason for the surprisingly sharp increase in home prices is itself no surprise—it’s still the shortage of listings causing a “very very low inventory.” The supply of homes being offered on the market fell 11.9% last month, year over year—which also meant a slight drop in activity. That’s likely to cause a continuing drag on volume for the rest of the year, unless new listing numbers rebound. Since one likely effect of the strong prices should be exactly that—to encourage more sellers to list their own properties during 2018’s peak season—what happens next is anyone’s guess (forecasts are mixed).
Buyers must have braced themselves for this year’s home prices, so CNBC could report that “Buyer demand is still strong, despite higher prices.” Buyer activity could be due to reports like those featured on MarketWatch, which calculated that homeowners of median-valued properties in half of the nation’s largest cities saw their homes’ equity increase “more per hour than their local minimum wage!” Calculations like that could make the most hesitant buyer reconsider the value of remaining on the sidelines.
If your own real estate plans are poised for action, I hope you’ll give me a call. Especially if you have been waiting for a seller’s market, your timing looks good!