U.S. home prices rose sharply in July, reaching a seven year high, as demand outpaced supply in many metropolitan areas.
Nationwide, prices rose 12.4 percent in July compared with the same period last year, according to the Standard & Poor’s/Case-Shiller index.
“Since April 2013, all 20 cities are up month to month; however, the monthly rates of price gains have declined,” said David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices. “The Southwest continues to lead the housing recovery. Las Vegas home prices are up 27.5 percent year-over-year; in California, San Francisco, Los Angeles and San Diego are up 24.8 percent, 20.8 percent and 20.4 percent respectively. However, all remain far below their peak levels.”
Real estate agents have reported a slowdown in sales as the peak summer sales months have passed.
In San Francisco
, Eric Geleynse, an agent with GGVales.com
in San Francisco
, said that prices in the Bay Area and Silicon Valley
have already exceeded the peak prices reached during the boom. He said the median selling price of a single family home in San Francisco
in May 2007 was $965,000. In May 2013, the median price was $1,026,000, up 6 percent from the 2007 peak.
But sales activity has tapered off in the last few months.
“We’re off a little bit from the peak in May of this year,” said Geleynse, noting that bidding wars and price hikes were common. “Because interest rates have gone up we are seeing a pause in the market. But still, we are on an 18 month tear here in the Bay Area. We recovered sooner and more quickly than other markets.”
Rising mortgage interest rate, which have jumped nearly one percentage point in the last few months, has cooled buyer demand. Geleynse said seasonal patterns also played into San Francisco’s recent buying slowdown.
Prices rose sharply in the west and southwest markets, the report said. Prices in Las Vegas surged 27.5 percent year-over-year, while San Francisco jumped 24.8 percent and Los Angeles 20.8 percent.
“There’s a big imbalance between supply and demand,” added Geleynse. ”Representing buyers is really difficult in San Francisco right now. It’s a real challenge.”