The median value of all homes surpassed $200,000 in June, up 7% from just a year ago and at an all-time high for the U.S., according to a recent CNBC article.
Home Values Increasing In Double Digits
The reason? Well, that’s a bit more complicated. Part of it is that this number reflects only homes sold, not literally every home in the United States – and right now, higher-priced homes are the majority of homes being sold.
Lower-priced “starter” homes are in short supply at the moment, but if a large amount of them were dropped into the market and sold quickly, we would see the median price come down.
“Supply is keeping price gains in the double digits in several major metropolitan markets, and others that used to be affordable are no longer. Dallas, which has good supply of homes for sale, is seeing home values more than 10 percent higher compared with a year ago because of an increasingly strong local economy and job market.” – Diana Olick, “US homes are now more valuable than ever.”
Supply & Demand
Another factor affecting price overall is the amount of homes currently available on the market, regardless of type. According to Zillow, that number is down more than 11% between June of this year and June 2016.
With high demand from home buyers and a shortage in available homes, simple economics has driven home value to its highest point in history.
If you’re assuming that means less homes are being put up for sale, you’d be flat wrong – and here’s where the good news comes in for builders. Because of the sheer level of demand for homes, new inventory is being snapped up at lightning speed.
Per Zillow, the median number of days a home spends on the market now has fallen to just 73 as of May.
The takeaway if you’re a builder? The selling is good, demand is high, and value is going up. If you’re a buyer, you’ll need to be prepared to act fast to snag your dream home before someone else does.