New reports examining market conditions in three major metro areas show similar patterns unfolding in disparate corners of the country. In each of the three metro areas, house prices are soaring, while the supply of affordable houses is dwindling, forcing more new potential homebuyers to consider other options.
Ten-X, an online real estate transaction marketplace, released a pair of reports today, turning the spotlight on a pair of coastal cities: San Diego, California, and Miami, Florida. The story is largely the same in both cities: homes are still moving at a brisk clip, but the lack of cheaper options is making life difficult for the first-time homebuyer. According to Ten-X's Second Quarter 2017 Economic and Single-Family Housing Market Outlook Report for San Diego, the second quarter saw San Diego existing home sales were up 5.6 percent from a year ago, but housing inventory fell 35.7 percent.
“Homes are moving even as prices continue to rise, but affordability is becoming a much larger concern—especially for people looking to buy their first home," said Ten-X EVP Rick Sharga. "A growing number of residents are looking at renting as a better option than buying.”
On the Miami front, Ten-X's Second Quarter 2017 Economic and Single-Family Housing Market Outlook Report for Miami found first-time buyers also struggling in the Magic City. "The Miami housing market remains solid, but limited inventory of homes for sale and rising prices are giving first time home buyers fewer opportunities," said Sharga. As in San Diego, more potential Miami buyers are considering the rental route because there simply isn’t enough available in their price range.
Meanwhile, some things looked better in the middle of the country, but the same problems are still present. Metrostudy’s new Q3 survey of Dallas found the city holding fast as the number-one market for new home starts, but found homebuyers pushing back against rising home prices.
Paige Shipp, Director of Metrostudy’s Dallas Fort Worth market, said:
“During the third quarter, DFW homebuilders started only 264 homes priced below $200,000, which confirms the near extinction of the sub-$200k new home in DFW.” However, Dallas is seeing an uptick in closings between $200,000 and $300,000. Closings priced $200,000 to $250,000 rose 5.6 percent in Q3, and those between $250,000 to $300,000 rose 13.7 percent.
“Starts outperforming closings from $200,000 to $300,000 indicates builders are delivering more affordable product in DFW,” said Shipp.