Home prices continued their steady climb in every state in America—except for one. Thanks for being real, Alaska!
If you’re thinking that this steady, inexorable price escalation must have an end in sight, think again. In fact, prices are predicted to go up an additional 5.2% across the country over the next year, according to CoreLogic’s Home Price Index and Home Price Forecast.
Nationally, monthly prices rose 1.1% and were up 6.7% year over year as of June, according to the report based on sold prices. In Alaska, they dipped 0.6% from June 2016.
Why Alaska? “The fact that the oil markets have been a little bit slow probably has as many people looking to leave the state as coming in,” says Chief Economist Danielle Hale of realtor.com®. Even with the decline, it’s unlikely hordes of wannabe homeowners will be heading for the freezing “Last Frontier” state any time soon.
The rest of the price hikes can be explained by the sheer lack of homes on the market. June had the lowest number of properties for sale in the second quarter of a year in more than 30 years. That’s driven prices up to almost 50% more than what they were at the nadir of the housing market, in March 2011, during the depths of the financial crisis.
“The growth in sales is slowing down, and this is not due to lack of affordability, but rather a lack of inventory,” said CoreLogic’s Chief Economist Frank Nothaft in a statement.
And that dearth of homes for sale might be leading to overvaluing in four metro areas where prices are at least 10% more than long-term, sustainable levels, according to the CoreLogic report. Annual prices are up 8.7% in Denver; 3.4% in Houston; 4.4% in Miami; and 4.9% in Washington, DC.
Buyers “won’t have many options, and the options [they] find are likely to be competitive with other buyers” driving the costs up even further, says Hale.
State by state, annual prices surged the most in Washington, home to Seattle, by 12.7%. It was followed by Utah, at 10.7%; Colorado, at 9.2%; Idaho, at 9.1%; and Oregon, at 9%.
Seattle, Denver, and Portland, OR, have been hot markets with buyers submitting offers over asking price and engaging in bidding wars for some time now.
But recently metros such as Salt Lake City and Boise, ID, have been joining their ranks. Year-over-year metro home prices went up a whopping 8.8% in Salt Lake City and 11% in Boise in June, according to realtor.com data.
Utah and Idaho “have a lot of the benefits and advantages of other sunny Western cities with lots of outdoor activities, decent job growth, technology companies relocating to that area,” Hale says. They’re “attractive places to live especially since [they’re] more affordable than some of the other Western markets.”