The housing market in the United States has shown remarkable recovery so far in 2023, with a new Zillow estimate putting the overall value of the market at $51.9 trillion, $1.1 trillion higher than the previous peak reached in June 2022. That total value also represents a 49 percent increase over home values prior to the start of the pandemic in February of 2020.
While a small portion of this growth can be attributed to a 1.3 percent increase in the average value of a house over the last year, new home construction has been the driving force behind the surge.
The Zillow report also shows that developers are starting to adapt to the needs of today’s potential home buyers who are worried about higher mortgage rates by building smaller, more affordable homes or townhomes. There’s a new trend for higher-density homes to work around increased costs. “New home sales rose this year while existing home sales fell, and should make up a bigger piece of the home sales pie for as long as rates remain elevated,” Mr. Divounguy explained.
Karen Hatcher, CEO of Sovereign Realty & Management in Atlanta, told The Epoch Times that while the Atlanta metro area hasn’t seen a lot of new construction, the suburban areas have due to more land availability. “We’re seeing a lot of boutique communities of single family homes in the mid-priced to luxury range,” she said. “People’s lifestyles have changed so the demand for housing has increased and if inventory stays where it is, there could be a huge shortage. We definitely need more new construction.”
Hatcher said home costs have been overpriced for the past few years following the pandemic. “It’s still a seller’s market and we’re still seeing multiple offers. The school systems with the higher values are the toughest markets to get into,” she explained.
California took the top spot for harboring the highest home values with more than $10 trillion, which is almost 20 percent of the national total. Florida, New York, Texas and New Jersey round out the top five.
Over the last five years, the four most valuable metro areas have remained unchanged: New York, Los Angeles, San Francisco, and Boston. Miami, a newcomer, has risen to fifth place, knocking Washington out of the top five.
In Florida, the four markets gaining the most value since the beginning of the pandemic include Tampa at 88.9 percent growth, Miami at 86.6 percent, Jacksonville at 82.4 percent, and Orlando at 72.3 percent.
Teresa Kinney, CEO of the Miami Association of Realtors told The Epoch Times that South Florida has experienced a huge wealth migration. “Home buyers and financial and tech companies from high-taxed, high-density states have relocated to South Florida. The population increase, coupled with the strength of Miami’s luxury market—ranked among the best in the world—is why South Florida has now hit 141 consecutive months of price appreciation.
“Miami has registered nearly 12 years of consecutive home price growth, the longest streak on record,” added Ms. Kinney. The top locations with residents relocating to Miami include New York, Los Angeles, Chicago, San Francisco, and Washington.
According to the report, California still commands some of the country’s highest-priced homes, with the San Jose-Sunnyvale-Santa Clara area topping the median sales prices at $1.474 million. The San Diego-Chula Vista-Carlsbad region is a close second with a $1.099 million median sales price, followed by San Francisco-Oakland-Berkeley at $1.049 million. The New York-Newark-Jersey City area is significantly lower, with a median home sales price of $717,000.
Scott Segall, an agent in Douglas Elliman’s office in Beverly Hills, California, told The Epoch Times he hasn’t seen any downturn among the nation’s top-priced homes. “There seems to be a disconnect between the interest rates and the home prices,” he said. “Today, $1 million will get you just a small house on a mediocre street.”
Despite surge in new construction, inventory remains persistently low, according to Realtor.com, putting upward pressure on home prices.
