The Dallas-Fort Worth area was one of the top areas of the country where the median home prices are farthest above pre-recession peaks, a new report says.
Metro areas with Q1 2018 median home prices the farthest above their pre-recession peaks were Houston (69 percent above); Dallas-Fort Worth (67 percent above); Denver (62 percent above); San Jose (60 percent above); and San Antonio (57 percent above).
ATTOM Data Solutions, an Irvine-based company that analyzes property databases, released its Q1 2018 U.S. Home Sales Report on April 18, which shows that median home prices in 57 of 105 metropolitan statistical areas analyzed in the report (54 percent) were above their pre-recession home price peaks in the first quarter.
Nationwide the median home price of $240,000 in Q1 2018 was less than 1 percent below its pre-recession peak of $241,500 in Q3 2005, but still up 9.1 percent from a year ago.
“Rising interest rates and recently enacted tax reform that removed some tax incentives for homeownership were not enough to cool off red-hot home price appreciation in many parts of the country, with 30 of the 105 local markets analyzed posting double-digit gains in median home prices in the first quarter,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Home prices are still below pre-recession peaks in 46 percent of local markets, but nearly one-third of even those markets posted double-digit home price appreciation in the first quarter.”
Other major metros with at least 1 million people and with Q1 2018 median home prices at least 30 percent above pre-recession peaks were Nashville (46 percent above); Austin (45 percent above); Salt Lake City (42 percent above); Raleigh, North Carolina (35 percent above); Indianapolis (31 percent above); and Oklahoma City (30 percent above).
Prices in Philadelphia, Hartford, Chicago, Baltimore, Tucson were still below pre-recession peaks.
Median home prices in 48 of the 105 metro areas analyzed in the report (46 percent) were still below pre-recession peaks in Q1 2018, led by Bridgeport-Stamford-Norwalk, Connecticut (25 percent below); New Haven, Connecticut (22 percent below); Allentown, Pennsylvania (21 percent below); Philadelphia (20 percent below); and Hartford, Connecticut (19 percent below).
Other major metros with at least 1 million people and with Q1 2018 median home prices at least 15 percent below pre-recession peaks were Chicago (19 percent below); Baltimore (17 percent below); Tucson (16 percent below); Las Vegas (16 percent below); and New York-Newark-Jersey City (15 percent below).
Among the 105 metropolitan statistical areas analyzed in the report, those posting the biggest year-over-year increase in median home prices were San Jose (up 33 percent); Flint, Michigan (up 20 percent); Spokane (up 18 percent); Reno (up 17 percent); and Seattle (up 16 percent).
“In 2018 and in the next couple of years, we’ll see more markets where home prices are entering boom territory. It’s strange to say after so many years of stagnation, but buyers will want to beware right now in Denver, Miami, the LA area, Austin, San Francisco, Tampa and Seattle, where home prices are already 25 percent higher than they should be,” said Ingo Winzer, founder and president at Local Market Monitor, a newsletter that analyzes local market conditions.
“We don’t think a bust is imminent – in fact we think prices in these markets will keep going up for several years – but dynamics like this have always ended badly in the past. If you’re thinking of selling, this year or next would be a good time. If you’re thinking of buying, either have a very short-term outlook or a very long one,” Winzer said.
HIGH-END HOME SALES
The report also included an analysis of high-end home sales trends in the wake of tax reform legislation passed in December that caps the mortgage interest deduction for federal income taxes at interest paid on $750,000 and caps the state and local tax deduction (including property taxes) at $10,000.
Nationwide homes selling for more than $1 million accounted for 4.18 percent of all U.S. single family home and condo sales in Q1 2018, up from 4.02 percent of all sales in Q4 2017 and up from 3.38 percent of all sales in Q1 2017 to the highest level since Q4 2007.
But the impact was varied depending on market.
In San Jose, the nation’s highest-priced metro area with a median sales price of $1.15 million in Q1 2018, the share of homes selling above $1 million increased from 39.37 percent in Q1 2017 to 58.95 percent in Q1 2018.
In Westchester County, New York, which had the highest average property tax among 1,414 counties analyzed by ATTOM Data Solutions, the share of home selling above $1 million decreased from 17.68 percent in Q1 2017 to 15.05 percent in Q1 2018.
The analysis also looked at median price per square foot for homes that sold below and above $1 million. The median price per square foot of single family homes and condos that sold in the first quarter for under $1 million increased 10 percent from a year ago while the median price per square foot of homes that sold above $1 million increased 6 percent.
The price-per-square foot trends also varied by market.
In Westchester County, New York, the median price per square foot for homes that sold above $1 million increased 2 percent compared to a year ago while the median price per square foot for homes that sold below $1 million increased 11 percent. In Santa Clara County in the San Jose metro area, the median price per square foot for homes that sold above $1 million increased 17 percent from a year ago while the median price per square foot for homes that sold below $1 million increased 16 percent.
Other findings
• Sales to buyers using FHA loans (typically first-time homebuyers) accounted for 11.9 percent of all single-family home and condo sales in Q1 2018, down from 12.6 percent in the previous quarter and down from 14.4 percent in Q1 2017 to the lowest level since Q1 2014 – a four-year low.
• Distressed home sales – including bank-owned (REO) sales, third-party foreclosure auction sales, and short sales – accounted for 14.7 percent of all single-family home and condo sales in Q1 2018, up from 13.6 percent in Q4 2017 but still down from 16.9 percent in Q1 2017.
• All-cash purchases represented 30.0 percent of all single-family home and condo sales in Q1 2018, up f