Phoenix Tops Nation In Home Price Growth — Yet Again
Phoenix outdid itself again — topping the S&P CoreLogic Case-Shiller Index for the 16th consecutive month.
Metro Phoenix once again led the nation in year-over-year home price increases in October, the newest data available — at a whopping 12.7%. Seattle trailed behind at 11.7%, followed by San Diego, at 11.6%. Nationwide, the report shows an 8.4% gain in October, up 7% from the previous month, and representing a new high.
What’s more, said CoreLogic Deputy Chief Economist Selma Hepp, Phoenix’s low-tier home prices were up a staggering 15% in October, representing the strongest growth among 16 cities for which prices are recorded by tier.
“Still, Phoenix remains about 2% below their previous peak,” she told the Business Journal. “The strength in home price growth in the region reflects robust demand amid very low inventories, which are still tracking about 30% below last year’s levels. In other words, at the current rate of home sales, current inventory would sell out in a little more than a month.”
Looking ahead, 2021 will present a new set of challenges, both for the economy and the housing market nationwide, Hepp said.
“While distribution of coronavirus vaccinations is underway, there may still be some bumps along the way to economic recovery,” she said. “Fortunately, some critical economic stimulus support appears to also be underway soon, hopefully buffering the impacts of recent shutdowns.”
Depending on the path of the pandemic over the next few months, policymakers may opt to extend foreclosure moratoriums, in addition to the recent extension of rent eviction moratoriums, which will help struggling homeowners and renters, she said.
“Taken together, recent stimulus actions are likely to help housing market demand and ensure continued home price growth,” Hepp said.
Matthew Speakman, a Zillow Group Inc. economist, said the pace of home price appreciation continues to gear up as 2020 winds down.
“The path of home prices in recent months has been nothing short of remarkable,” Speakman said. “Record low mortgage rates, a waec of households aging into homeownership and a limited number of homes for sale all combined to stoke competition for houses and placed consistent upward pressure on prices for the better part of the last calendar year.”
These factors appear likely to remain in place in the near term, and an incrementally improving economy should encourage more buyers to enter the market, Speakman said.
“Taken together, this torrid pace of home price appreciation appears primed to continue well into 2021,” he said.