Home prices have risen to the highest point seen since at least 2016, but that doesn’t mean there’s a bubble in the offing, according to a Redfin report released Friday.
The median sale price rose 17% year-over-year to $330,250, according to Redfin’s report for a four-week period that ended March 14. The equivalent asking price was $350,972, which was up 10% from the same period last year.
That has prompted renewed reassurance that the current rise in housing values won’t end with a crash like the one seen after 2006, because
“I wouldn’t call this a housing bubble because the demand for homes is truly there and the buyers can afford these high prices,” Redfin Chief Economist Daryl Fairweather said in the report. “Bubbles burst; I don’t see that happening.”
Redfin’s most recent year-to-year comparisons reflect the steep drop in sales at the outset of the pandemic, which exaggerates the extent of the increases seen.
Still, industry calculations can vary but most sources agree that prices last year were record-setting. Various measures for last year’s median housing value range from around $250,000, based on sales, to $350,000 for asking prices.
Attom Data Solutions, for example, pegged last year’s median sales price at $266,250 with a 12.5% year-over-year appreciation rate. That marks the highest annual change in price since at least 2005.
While there
“The best hope buyers have is that home prices start to grow at a slower pace, but I don’t expect prices to fall,” she said.
That’s because supply relative to demand keeps shrinking. New listings were down 17% in Redfin’s report. Pending sales were up 21% year-over-year.
The supply demand imbalance has led to some “irrational” buying, Fairweather noted.
“Some people are willing to do whatever it takes to win a bidding war to the point they may be overpaying,” she said.
The percentage of homes that had an accepted offer within one week of hitting the market was 44%, up from 32% last year, according to Redfin.
