The Everest Newsletter: Residential, September ’18 Edition
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Just the Peaks This newsletter, at a glance
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Economists agree: the U.S. residential market still rocks
See which cities top the list—and what they tell us
Despite rising consumer confidence and plummeting unemployment across America, buyers are still feeling the heat with elevated mortgage rates, sky-high home prices and generally scarce listings. As summer draws to a close, we turn our attention to the latest stats surrounding the U.S. residential real estate market.
For investors looking to build, flip, buy or sell, one thing is clear: the time is still right to make your move. Although sales of new and previously-owned homes have dropped slightly, we’re not in dire straits. Yes, limited supply and inflated costs continue to be a burden for first-time buyers, and some stats have slumped as a result. But in the grand scheme of things, the U.S. market is still on top. Read on to learn why.
Sales in the city
According to Bloomberg, homes in 20 of America’s biggest cities have posted the smallest gains in over two years. Sounds dismal, right? As demand diminishes due to rising home prices, the headlines have inspired apprehension throughout the industry. However, put into perspective, our market is remarkably healthy.
When compared to the GDP of countries across the globe, cities like New York, Los Angeles, Miami and Chicago boast some seriously impressive statistics. The 5 boroughs alone report a cumulative real estate value of $2.55T, which is equal to France’s entire gross domestic product.
Meanwhile, San Francisco’s $1.25T total corresponds with all economic activity happening in Mexico. These comparisons aren’t necessarily shocking or relevant, but they reinforce the immense size and scope of our metropolitan markets.
Love thy neighbor(hood)
Curious to see how your closest city measures up? Recent reports reveal each of the top 50’s total real estate value, median home value and comparative ranking among competing cities. Here’s a look at the most telling tidbits:
Residential Rankings
2018
California
The only state to have more than one city rank among the top ten
New York City
Ranked #1 with $2.55T total value & $454k median home value
San Jose
City with the fastest appreciation in the country at $800 gain per day
Saudi Arabia
The country with the total GDP value closest to Boston, Chicago & D.C.
Miami
City ranked 7th overall with $648B value, equivalent to all of Argentina’s GDP
Silicon Valley
Region with the highest median home value @ $1.07M
*Stats contributed by The Real Deal
What now? Keep trekking to the top
If you’re currently buying or selling in one of today’s top 10 cities, invest confidently knowing your market contributes 33% of America’s total residential real estate. Through the industry’s many ebbs and flows, our country’s more than 155 million properties persist while remaining on par with some of the most financially prolific nations across the globe.
To clarify findings, we acknowledge that the pairings don’t exactly compare ‘apples to apples.’ Still, the matchups make our regional markets stand out in sharp relief. Take New York, for example. The city not only claims the biggest chunk of change, but also trumps the GDP of all but six countries in the world: India, Germany, Japan, China, the United Kingdom, and—of course—the United States.
Economists hope this fresh outlook will help buyers embrace the current situation, especially in the lower- to middle-end housing markets. “Home values across U.S. metropolitan cities are generally trending upward, but homes in some cities are seeing eye-popping rise,” says Dennis Lynch of The Real Deal. In some particularly cutthroat cases, “First-time buyers [need] nearly 23% of their income to afford a home.”
In light of these facts and figures, we encourage our partners’ renewed optimism as we enter the final stages of 2018. As always, we’re here to squash uncertainty and secure you the most competitive financing possible.
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