Appreciation in the Northwest – Setting a Red Hot Pace
In spite of easing a bit from prior months, home prices are continuing to experience positive appreciation.
The S&P Case-Shiller 20-City Composite index for May (as reported at the end of July) rose 5.2 percent year over year. This accounts for slight slowdown from April’s 5.4 percent increase. The Case-Schiller index tracks changes in the value of residential real estate nationally as well as in 20 metropolitan regions. The indices are designed to measure increase or decrease in the market value, with the data being released on the last Tuesday of each month and having a two-month lag time in data that is reported.
According to Davis Blitzer, managing director and chairman of the Index Committee at S&P, “Overall, housing is doing quite well. In addition to strong prices, sales of existing homes reached the highest monthly level since 2007 as construction of new homes showed continuing gains.”
The composite reflects the average across the 20 cities analyzed in the report. A bit more interesting for us here in the Northwest are the averages for Seattle and Portland. Portland, led the group of 20 cities, with price appreciation of 12.5 percent in May. Seattle followed with a 10.7 percent. This year over year trend was also reflected by appreciation of 7.3 percent in metro greater Boise (Ada County). As spring barreled into summer, the Pacific Northwest leads the nation in home appreciation value..
As we have talked about in previous blogs (link), if you want to see where home prices are going in the near term, look at supply levels. And yes, supply levels in Portland, Seattle and Boise are all still hovering between the 1-2 months (double digit appreciation) and the 3-4 month (single digit appreciation) range.
According to Dan Rowe, owner of Dan Rowe Realty, for the month of June in Boise:
Boise existing homes – 602 sold
Median $256,743- Average $222,250
Average 21 days on market
The Boise housing market is RED hot … with the fewest homes for sale and lowest-ever supply levels.
Investors should be working with Veristone (in Portland, Boise and Seattle) to source properties in these markets now! With continuing low inventories and solid appreciation, when Veristone helps you source it and fix it, you can be confident of the sale when it comes time to flip it.