Summit Valuations, LLC, a full service valuation company, announced today the release of its latest Residential Real Estate Market Overview, this time using information collected during April 2016, the most current available industry data. The report includes analysis from Summit’s Chief Valuation Officer, Mark Melikian, author of the report. The findings are very interesting. Here’s the scoop:
“Predicting future residential home values is very difficult, especially given the many differences we see between regions,” Melikian said. “However, the data we’re seeing, when trended over the past few months, indicate that we will likely see a drop in the number of homes sold over the next month or two and a continued decrease in housing affordability in many markets.”
In May 2016, the month’s supply of housing, the pending home sales index, the federal unemployment rate and mortgage rates all decreased year over year. The median sales price and the seasonally adjusted annual number of homes sold both increased during the month, according to the data. Melikian says that the data suggest a decrease in the number of homes sold over the next 30 to 60 days.
On a regional level, the South had the highest number of existing home sales and the West had the highest median price. The West experienced the largest percentage increase in the number of seasonally adjusted existing home sales while the Midwest had the largest percentage gain in median sales price, month over month. Charts to this effect are included in the report Summit issued this week.
Melikian pointed out that a decrease in sales volume, housing price affordability challenges in some markets and inventory levels remaining level in the past month could result in a relatively stable, or even slightly lower, median sales price in the next month.
“Long term, home prices in the residential real estate market continue to be driven by tight inventory, investor activity and interest rate,” Melikian said. “An increase in inventory or interest rates, or a reduction in investor activity could lead to an eventual decline in prices. Affordability concerns, which were addressed in the February 2016 report, also impact home prices in areas where it now takes a larger percentage of personal income to afford a house. As a result, these markets could see home prices leveling in the near future.
Summit’s report provides data made public by the U.S. Government, the National Association of Realtors and Freddie Mac. Melikian has been appraising real estate since 1987 and has been active in nationwide valuation services since 2005. He has successfully led teams of analysts, developed valuation services to meet client needs and represented buyers and sellers in secondary market loan tie out meetings. Much of his recent experience has focused on forensic reviews of REO properties for Fannie Mae and Freddie Mac. Mr. Melikian holds a B.S. in Business Administration from San Diego State University.