Article originally posted on Phoenix Business Journal on June 30, 2021
The Phoenix metro is closing in on two uninterrupted years with the fastest-rising home prices in the nation, according to the latest S&P CoreLogic Case-Shiller Indices.
The Valley’s home prices jumped 22.3% year-over-year in April — more than 2% higher than their rise in March. That’s the 23rd straight month Phoenix has led the nation in the report.
Just behind Phoenix were San Diego and Seattle, which respectively saw year-over-year increases of 21.6% and 20.2% in April. These three leading cities exemplified the strength of prices in the West, which led the nation with prices up 17.2%. In the Southwest in particular, prices were up 16.9%.
Matthew Speakman, an economist for Zillow Group Inc. (Nasdaq: Z), said he sees little evidence that forces behind home price growth in Phoenix and other places will abate any time soon.
“Mortgage rates remain near historic lows, a demographic wave of households aging into prime homeownership years continues to swell, and despite showing some signs of bottoming, the number of available homes for sale remains historically small, particularly given the elevated demand for housing,” Speakman said. “… What’s more, despite sharply rising prices, demand for homes remains very strong. Bidding wars for the relatively few houses available remain common and homes are going under contract at an increasingly fast pace.”
Speakman did point to upticks in inventory as an indication that red-hot market conditions may cool down — just not in the near future.
“A return to a balanced market remains a long way off, and there are few, if any, signs that home price appreciation will start to subside anytime soon,” he said.
The report put the average national home price growth at 14.6%, which was up from 13.3% a month earlier. All 20 cities in the report’s 20-city composite reported higher price increases for the year ending April versus the year ending in March, the report said.
Nationally, it was the 11th consecutive month of accelerating home prices, according to Craig Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices.
“April’s performance was truly extraordinary. The 14.6% gain in the National Composite is literally the highest reading in more than 30 years of S&P CoreLogic Case-Shiller data,” Lazzara said in a statement. “Housing prices in all 20 cities rose; price gains in all 20 cities accelerated; price gains in all 20 cities were in the top quartile of historical performance. In 15 cities, price gains were in top decile.”