Average Home Price In The US

Home prices in the US have always been on the higher end of the scale. According to a report from Zillow, home prices in the US have hit upwards of $293,349 as of June 2021, which is 13.2% higher than the price 12 months ago. The joint report by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development (PDF) stated the average sales price of new houses sold in June 2021 was $428,700, and the median sales price was $361,800.

Reasons For The Price Hike

There are multiple reasons for the price hike, with the pandemic being the main cause behind the factors. Here is a list of the factors that have caused the increase in the price hike.

Price Hike In Softwood Lumber

During the pandemic, softwood lumber prices spiked by more than an astonishing 300%. Although the prices have radically fallen in the last month, they still stand around 75% higher than the average rate in 2019.

High Demand For New Homes

The pandemic has caused many people, especially city dwellers, to move to the suburbs. Moreover, millennials, who make up the largest group of generations, have entered the home buying years. This has caused high demand in the housing market, raising prices. Even homes that need major repairs and fixes are also high in demand due to the lack of available homes.

Shortage Of Resources

Besides the above-stated reasons, shortages of appliances, human labor, and affordable lots have all contributed to the price hikes in homes. The Pandemic is to be blamed again for the cause, as social restrictions and low productivity rates lead to these factors.

Cities With The Highest Prices

According to Insurify, San Jose, California, has the highest average home sale price of $1,068,398. The next four cities in the pecking order are San Francisco, Los Angeles-Long Beach-Anaheim, Ventura, and San Diego, all located in California, ranging from almost $600,000 to $811,800. According to CNBC, the 20 cities with the highest average home-sale prices reported a 17% increase in year-over-year value. Among these cities, Phoenix, San Diego, and Seattle reported the highest year-over-year gains – 25.9%, 24.7%, and 23.4%, respectively.

How Much Do Homes Really Cost?

Despite the record-high prices shown above, the actual cost of homes can tend to be much higher for US audiences. This is because many unlisted expenses go along with the listed price of the homes arising from mortgages and repairs. For example, fixer-upper homes that need major repairs can cost an extra 10% or more of the listed house price. This percentage increases or decreases depending on the house condition and the spending power of the new homeowners.

Furthermore, high mortgage rates can significantly increase the price of houses. The most popular 30-year fixed mortgage has an average annual interest rate of 2.98%. This may not seem like much, but it doubles the price of the house by the end of the payment. Thus, certain factors like these have to be kept in mind while buying a new home. For example, a family home in the suburbs with a listed price of $555,000 would cost around $1,051,170 at the end of the 30-year fixed mortgage. This excludes the cost of repairs and renovations at the time of purchase.

Of course, you can neglect this amount if you pay the full amount up-front, but that is not often the case. Most people from the US audience opt for fixed mortgages ranging over different years. Credit debts and high living expenses restrict people from paying full amounts for homes at the time of purchase. The U.S. is one of the most expensive countries to live in, and it is often ranked at the top when it comes to high real-estate prices.

Conclusion

In conclusion, buying a new home is one of the best experiences in life. It brings happiness and satisfaction to your life, especially after all the hard work you spend earning money.

Purchasing a house, as we have seen, is quite expensive with many hidden extra expenses. Moreover, maintaining a home and other financial expenses can become a burden in no time. This is why it makes sense to weigh your options well and choose the right builder for this important phase of your life. Contact us today to learn more.

What to Expect from Real Estate in South Texas

The real estate market in South Texas bears the aftershocks of a pandemic. It has been further affected by recent international affairs, fluctuations in the economy, and a tense political situation at home.

However, this does not mean that investments in real estate have fallen beyond recovery. Before you jump at the first chance to pick a house, take a quick look at the real estate scene.

We have summarized the present state of real estate in South Texas in five prominent trends as you can see below:

1. A growing population in an uncertain job market

Unlike New York or San Francisco, the cities of South Texas are witnessing a steady rise in population. Encouraged by job creation, these areas are acquiring residents in thousands. For instance, the job market in McAllen has more than doubled.

This is a piece of comforting news for investors for more people means more housing opportunities to invest in. But two to three months into 2020 has the population grappling with cuts in salaries and a volatile local market. Looks like real estate might just be a bit slow to pick up, now that the second wave of the pandemic has crashed upon the state.

2. Affordable housing

In spite of being among the best performing real estate markets in the US for 5 years in a row, housing has still been affordable. House building has been at an all-time high with the state getting the maximum number of permits in 2019 alone.

This was a boon for home builders, renters, realtors, movers, and a host of related professions. In the present scenario, the market is, however, showing signs of deceleration, with more and more people opting out of investing in new homes. This is not to say that people are not buying properties. With the right builder, you can still cut a fitting deal in the valley.

3. Declining in property listings

In the post-pandemic world, few people are listing their homes for sale. South Texas is staring at a decline of around 2 percent per month in home sales. Covid-19 has further increased the number of houses pulled back from the market.

Many homeowners have been unable to include their homes into the sales channel, on the other hand. In addition, the demand for new homes has fallen. The trend is seen in both single-family house sales as well as multiple-family properties.

Customers are wary of visiting homes and this soft demand has led to a crash in sales figures. Virtual showings have gained traction but sellers do not seem to be in the mood to hold open houses. There is a general air of gloominess among both buyers and sellers.

4. The rising rate of employment and the threat of recession

Experts predict that the rate of joblessness might push the double digit mark if the economy continues to fall. At this rate, South Texas could see a surging wave of recession. With faltering cross-border commerce, areas like the Rio Grande Valley may be forced to accept a sharp decline in house prices.

It remains to be seen how long residents can cope with a lack of jobs since being without one directly affects their spending power. Even after businesses pick up, homeowners would still have to deal with heavy mortgages. In such a situation, owners might try to sell off their properties at whatever prices they can manage and that’s when prices might actually begin to plummet. Otherwise, property prices tend to swing within a fixed range.

5. The Effect of Covid-19

One of the biggest factors affecting real estate is public health. The extent of the pandemic is yet to be measured and it might have far-reaching consequences for homeownership. With social distancing and related protocols in place, the general mood is discouraging to builders and investors.

Yet, Texas house sales figures are better than the national average in spite of a sluggish market. The final deciding factor is jobs after the population recovers. How quickly and steadily trade picks up will determine the future of real estate in South Texas.

While everything seems to be going south, an experienced realtor and builder should be able to find the perfect home for you. Whether you want to rent or build, we can connect you with the right property in the market that fits in with your style and finances.

Refs:

https://www.recenter.tamu.edu/articles/technical-report/Texas-Housing-Insight

https://www.texastribune.org/2020/04/07/coronavirus-texas-cools-real-estate-market-experts-dont-know-how-long/

https://www.mashvisor.com/blog/texas-real-estate-market-2020/

Category: Real Estate

How Much Does a New Home Really Cost?