Home prices experienced a large jump, from a 9% gain to 357%, over the past decade, as observed in a new report from Point2 released this week.
Point2’s new report studies the evolution of median single-family home prices in the 187 largest U.S. metros in the last decade (2011 to 2021).The overall median price of a U.S. single-family home more than doubled, from $166,200 in 2011 to $353,600 in 2021, and the median home price more than doubled in 69 U.S. metros over the past decade.
- In three California metros, the average single family home owner became a property millionaire in the last 10 years.
- In Q2 2022, Honolulu, Hawaii, joined San Jose, San Francisco and Anaheim, California, as the fourth metro where the median home price crossed $1 million.
- Detroit, Michigan, and Boise, Idaho, recorded single-family home price increases of more than 300%.
- Overall the smallest percentage increases in home prices, as well as two of the smallest net increases, were in Peoria and Bloomington, Illinois, along with Decatur, Illinois.
- Of the 59 large metros in the analysis, Detroit; Phoenix; and Atlanta saw the largest percentage gains, but San Jose, California; San Francisco; and Anaheim, California, recorded the most substantial net increases.
- Among the 93 mid-sized metros Boise, Idaho, saw the largest percentage increase in home prices at 307%, however Naples, Florida, and Boulder, Colorado, added the largest net amounts.
- Five of the 35 small metros saw home prices more than double, with increases between 110% and 223%, whereas Barnstable Town, Massachusetts recorded the most significant net increase at $306,300.
- At the national level condo prices went up 80%, and at the local level condo prices went up across the board, ranging from highs of 544% in Atlanta, Georgia, and 430% in Reno, Nevada, to lows of 11% in New Haven, Connecticut and 6% in Hartford, Connecticut.
According to the report, market features leading to the unprecedented price growth include low inventory, increasing demand, supply chain and construction snags, more buyers prioritizing more spacious homes, and older generations being far less open to downsizing than before.
Since condos are the more affordable option compared to single family houses they are making a comeback and seeing a higher demand from homebuyers, as stated by the report, but this increase isn’t anywhere near the increased prices and mortgage rates in the single family home segment. Both condo and single-family home prices are still going up, while sales are starting to fall.
While these stats may make homeowners and home sellers happy, they have the opposite effect on buyers. “In retrospect, the low mortgage rates acted like a thin veil separating homebuyers from increasingly worrisome home prices. But, given the recent attempts aimed at reducing inflation, that thin veil is lifting,” said the authors of the report. “The jarring home prices are deepening the mortgage affordability crisis, while rental inflation ensures that renters, as well as homebuyers will face tougher conditions.”
For the full report, click here.