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Hello Ryan,

Welcome to my weekly Real Estate Newsletter. I hope you find some value in the content. If you would like some additional content, data, or information please let me know,

Ryan

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Moving to Orange County Secrets Revealed

Total value of U.S. housing market sees big gain

The total value of U.S. homes jumped 5%, or $2 trillion, in value over the last year. According to Redfin, that’s the biggest gain in nearly a year, as a shortage of houses for sale propped up values. Here’s what else Redfin reports:

The total value of the U.S. housing market is $47.5 trillion, up 13.3% ($5.6 trillion) from two years ago

In December 2023, the average U.S. home had a value of $495,183, up from $474,740 one year earlier.

Home values are growing faster in suburban and rural areas than in urban areas
Rural homes – 6.3% increase YOY
Suburban homes – 5.6% increase YOY
Urban homes – 3.6% increase YOY

My take:

That last bullet basically sums up the housing market over the past few years. Even though many workers are returning to offices and moving back to urban neighborhoods, a lot of Americans continue to work remotely. I don’t see this changing for a long time… possibly a long, long time. This is why I think home values in suburban and rural areas will continue to see this type of growth relative to urban areas. Those areas are becoming highly desirable places to live.

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Current Mortgage Rates 03/01/24

Single-family housing shortfall increases

The gap between single-family (SF) housing starts and household formations was at 7.2 million at the end of 2023, up from 6.5 million in 2022. That means there is now a shortfall of 7.2 million SF homes due to a decade of underbuilding in the United States, according to Realtor.com’s latest report on housing supply and buying trends.

Although new construction of SF homes has increased in the past two years, household formation has outpaced housing starts over the past decade. However, when multi-family (or apartment) construction is included in the analysis, it reduces the gap to 2.5 million homes.

Here are the metros with largest shortfall in single-family homes:

Deltona–Daytona Beach–Ormond Beach, FL
San Antonio–New Braunfels, TX
Palm Bay–Melbourne–Titusville, FL
Allentown–Bethlehem–Easton, PA-NJ
Grand Rapids–Kentwood, MI
Stockton, CA
Riverside, San Bernardino–Ontario, CA
Providence–Warwick, RI-MA
Bakersfield, CA
Miami–Fort Lauderdale–Pompano Beach, FL

My take:

I have known about this shortfall in SF homes for a while now. The increase in apartment construction has helped a lot, but we haven’t been building enough for over a decade. It’s going to take time to close the gap.

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Market Report Week of 03/01/24

Anaheim, CA

Fri Mar 01 2024

This week the median list price for Anaheim, CA is $1,090,000 with the market action index hovering around 65. This is an increase over last month's market action index of 62.