Year-over-year home prices in the Washington region continue to rise, though at a slower pace than the national rate – and that may be a good thing for the overall health of the market.
The median sales price of a single-family home that sold across the Washington metropolitan area was $456,500 in the second quarter of 2019, according to new data from the National Association of Realtors. That’s an increase of 3 percent from the same period of 2018, compared to a national rise of 4.3 percent to $279,600 during the period.
Washington placed 13th highest among all metro areas in median price, although its rate of growth (like some other higher-priced localities) was lower than the national median.
Prices rose in 91 percent of the 178 markets surveyed by the real-estate trade organization, up from 86 percent in the first quarter, with 93 markets (52 percent of the total) seeing increase of 5 percent or more.
And median sales prices were higher in all quadrants of the country:
• The median sales price of $304,400 in the Northeast rose 5.4 percent from a year before.
• The median sales price in the Midwest was up 6 percent to $222,100.
• The median sales price of $247,700 in the South was up 3.9 percent.
• The median sales price in the West was up 2.8 percent to $409,500.
In metro areas where the median prices were $500,000 and above, however, a ceiling seems to have been reached, at least for now, as the single-family median prices were either relatively flat or declined when compared to the levels of one year ago.
The reason: Housing prices continue to outpace income gains. In San Jose, Calif. – currently the nation’s most expensive housing market – a family’s income would need to be nearly $300,000 per year in order to avoid spending more than 20 percent of it on housing costs, based on median sales prices.
“Housing unaffordability will hinder sales irrespective of the local job market conditions,” said Lawrence Yun, chief economist for the National Association of Realtors.
The five most expensive housing markets in the second quarter were the San Jose-Sunnyvale-Santa Clara metro area, where the median existing single-family price was $1,330,000, followed by San Francisco-Oakland-Hayward, $1,050,000; Anaheim-Santa Ana-Irvine, $835,000; Honolulu, $785,500; and San Diego, $655,000.
The five lowest-cost metro areas in the second quarter were Decatur, Ill., $97,500; Youngstown-Warren-Boardman, Ohio, $107,400; Cumberland, Md., $117,800; Binghamton, N.Y., $119,300; and Elmira, N.Y., $119,400.
Yun said home builders must bring more homes to the market in order to maintain a balance in the marketplace.
“New-home construction is greatly needed – however, home construction fell in the first half of the year,” Yun said. “This leads to continuing tight inventory conditions, especially at more affordable price points. Home prices are mildly reaccelerating as a result.”
Among other Virginia metro areas on the list, Richmond saw its median single-family sales price rise 7 percent to $285,700, while Hampton Roads saw its median price increase 3.9 percent to $248,000.