According to CoreLogic, on an annualized basis, home prices climbed by a very steep 7% in November.
Aside from being the third straight month when prices exceeded projections, the speed to market continues to fuel one of the strongest seller’s markets in decades.
On top of the chronic low inventory issues affecting this market, now the real estate market is meeting a new force: a rebounding economic climate and ongoing labor shortages affecting new home construction. Despite the historic low temperatures, one local agent based in New Jersey’s Ocean County reported two closings, one offer and one new listing – and that was on Monday!!
This market is obviously pushing the buyers out before the spring thaw.
Shortage Is Giving Way to Scarcity
Inventory in New Jersey for November is put at 4.9 months for single family homes, 4.5 months supply for condo-townhouses and a ridiculous 3.1 months supply for adult communities.
All of this buying activity is clearly a silver lining: the cloud to this climate change is over-valuation, which, according to CoreLogic, is the case in the nation’s top 50 markets, where half of the housing stock is now considered overvalued. The largest metropolitan areas are seeing the biggest gains.
Regions cited as overvalued were:
Las Vegas with annual price gains of 11%
San Francisco with annual price gains of 9%
Denver with annual price gains of 8%
Las Vegas and Denver are both considered overvalued, but San Francisco is not, as incomes in the tech capital far exceed the national level.
Seven out of 10 of the nation’s major markets were reported by CoreLogic to be overvalued, including Washington, D.C., Houston and Miami.