This will come as no surprise to prospective homebuyers in Pasadena, one of the most expensive markets in the US, but the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index—which covers all nine U.S. census divisions—reported a substantial nationwide 16.6% annual gain in May, up from 14.8% in the previous month.
And it’s not just Pasadena. In fact, prices are jumping all over the West Coast, as low inventory remains a factor in a number of US cities where prices are rising.
In June 2021, according to Redfin, Pasadena home prices were up 14.8% compared to last year, selling for a median price of $950K. On average, homes in Pasadena sell after 31 days on the market compared to 41 days last year. There were 186 homes sold in June this year, up from 114 last year, according to the realtor site.
Pasadena notwithstanding, Phoenix, San Diego, and Seattle reported the highest year-over-year gains among the 20 cities in May.
Phoenix led the way with a 25.9% year-over-year price increase, followed by San Diego with a 24.7% increase and Seattle with a 23.4% increase. All 20 cities reported higher price increases in the year ending May 2021 versus the year ending April 2021.
“A month ago, I described April’s performance as ‘truly extraordinary,’ and this month I find myself running out of superlatives,” said Craig Lazzara, managing director and global head of index investment strategy at S&P DJI.
“We have previously suggested that the strength in the U.S. housing market is being driven in part by reaction to the COVID pandemic, as potential buyers move from urban apartments to suburban homes,” said Lazzara. “May’s data continue to be consistent with this hypothesis.”
According to Lazzara, S&P has previously suggested that the strength in the U.S. housing market is being driven in part by reaction to the COVID pandemic, as potential buyers move from urban apartments to suburban homes.
Lazzara says that data from May continues to be consistent with that thinking.
“This demand surge,” he said, “may simply represent an acceleration of purchases that would have occurred anyway over the next several years.”
George Ratiu, Realtor.com senior economist, says an aerial view shows differing sides of the current real estate equation, but one consistent with what Pasadena buyers and realtors have seen for the past six months.
“On one hand,” Ratiu offered, “mortgage rates have been dropping for a month, moving toward the lows we saw in January and February of this year,”.
“On the other hand, more homeowners are entering the market, with the number of freshly-listed homes for sale advancing in 14 of the last 17 weeks. This dynamic confluence of housing developments is helping keep price growth in check as we approach August.”