WASHINGTON, DC – Persistent supply shortages throughout the country led to slightly quicker home price appreciation during the third quarter, according to the latest quarterly report by the National Association of Realtors. The report also revealed that seven of the 10 most expensive housing markets in the U.S. are in the West, including San Jose, California, which had a median single-family home price of $1 million for the second straight quarter.

The median existing single-family home price increased in 87 percent of measured markets, with 155 out of 178 metropolitan statistical areas (MSAs) showing gains based on closed sales in the third quarter compared with the third quarter of 2015. Twenty-two areas (12 percent) recorded lower median prices from a year earlier.

There were a growing number of rising markets in the third quarter compared to the second quarter of this year, when price gains were recorded in 83 percent of metro areas. Twenty-five metro areas in the third quarter (14 percent) experienced double-digit increases – unchanged from the second quarter of this year. A year ago, 21 metro areas (12 percent) saw double-digit price appreciation.

Lawrence Yun, NAR chief economist, says prospective buyers faced a very challenging market during the third quarter. “Mortgage rates around historical lows and solid local job creation made a winning formula for sustained home-buying demand all summer long,” he said. “Unfortunately for house hunters in several of the top job producing metro areas around the country, deficient supply levels limited their options and drove prices higher – especially in markets in the West and South.”    

The national median existing single-family home price in the third quarter was $240,900, which is up 5.2 percent from the third quarter of 2015 ($228,900) and surpasses this year’s second quarter ($240,700) as the current peak quarterly median sales price. The median price during the second quarter increased 4.9 percent from the second quarter of 2015.   

Total existing-home sales, including single family and condos, slid 2.2 percent to a seasonally adjusted annual rate of 5.38 million in the third quarter from 5.50 million in the second quarter of this year, and are 0.4 percent lower than the 5.40 million pace during the third quarter of 2015.  

“After climbing to their highest annual pace in over nine years in June, sales sputtered in the third quarter because inventory could not catch up with what was being quickly sold,” said Yun. “Only a decent rebound in September kept the monthly and annual sales declines from being even larger.”

At the end of the third quarter, there were 2.04 million existing homes available for sale, which was 6.8 percent below the 2.19 million homes for sale at the end of the third quarter in 2015. The average supply during the third quarter was 4.6 months – down from 4.9 months a year ago.

Despite quicker price growth last quarter, the decline in mortgage rates and an uptick in the national family median income ($70,306) slightly improved affordability compared to a year ago. To buy a single-family home at the national median price, a buyer making a 5 percent down payment would need an income of $51,661, a 10 percent down payment would require an income of $48,942, and $43,504 would be needed for a 20 percent down payment.

“If mortgage rates start to rise heading into next year, prospective buyers could face weakening affordability conditions in their market unless supply dramatically improves,” added Yun. “That’s why it’s absolutely imperative that homebuilders ramp up the production of more single-family homes to meet demand and slow price growth.”

The five most expensive housing markets in the third quarter were the San Jose, California, metro area, where the median existing single-family price was $1,000,000; San Francisco, $835,400; urban Honolulu, $745,300; Anaheim-Santa Ana, California, $740,100; and San Diego, $589,300.

The five lowest-cost metro areas in the third quarter were Youngstown-Warren-Boardman, Ohio, $90,300; Cumberland, Maryland, $94,400; Decatur, Illinois, $99,400; Elmira, New York, $109,400; and Rockford, Illinois, $111,900.

Metro area condominium and cooperative prices – covering changes in 59 metro areas – showed the national median existing-condo price was $225,100 in the third quarter, up 4.6 percent from the third quarter of 2015 ($215,200). Forty-one metro areas (69 percent) showed gains in their median condo price from a year ago; 17 areas had declines.

NAR President Tom Salomone, broker-owner of Real Estate II Inc. in Coral Springs, Florida, says the Federal Housing Administration’s recently-announced rule change to lower the owner-occupancy requirement for approved condominium buildings from 50 percent to 35 percent under certain conditions is a step forward for prospective buyers considering a condo.

“Condos have typically been an attractive and viable option for first-time buyers, and recent NAR data is showing that they’re having a small more success,” he said. “With this lower owner-occupancy requirement, Realtors® will have more options for their clients looking to buy a condo with an FHA mortgage. While we believe all condo buildings should have the rules applied to them equally, we also believe FHA has heard the concerns of Realtors and is moving in the right direction.”

Regional Breakdown

Total existing-home sales in the Northeast dropped 7.5 percent in the third quarter and are now 1.9 percent below the third quarter of 2015. The median existing single-family home price in the Northeast was $272,600 in the third quarter, up 1.2 percent from a year ago.           

In the Midwest, existing-home sales decreased 4.2 percent in the third quarter but are 1.0 percent above a year ago. The median existing single-family home price in the Midwest increased 5.6 percent to $191,200 in the third quarter from the same quarter a year ago.

Existing-home sales in the South declined 2.7 percent in the third quarter and are 0.9 percent lower than the third quarter of 2015. The median existing single-family home price in the South was $213,700 in the third quarter, 6.5 percent above a year earlier.

In the West, existing-home sales increased 4.6 percent in the third quarter and are unchanged from a year ago. The median existing single-family home price in the West increased 7.6 percent to $349,200 in the third quarter from the third quarter of 2015.

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CHICAGO, IL – Green Courte Partners announced that its fourth investment fund, Green Courte Real Estate Partners IV, LLC and its affiliates, has bought a portfolio of three independent living facilities located in suburban Detroit, Michigan. 

GCP is building a portfolio of high-quality age-restricted apartments and independent living communities serving the growing population of 55+ adults seeking an active lifestyle in an attractive setting. 

These assets bring GCP’s total senior housing portfolio to 764 units nationwide. 

The acquisition, completed on October 31, 2016, includes: Pine Ridge of Garfield – 117-unit independent living community built in 2006 and located in Clinton Township, Pine Ridge of Plumbrook – 118-unit independent living community built in 2004 and located in Sterling Heights, and Pine Ridge Villas of Shelby – 136-unit independent living community built in 1987 (renovated in 2006) and located in Shelby Township.

GCP has retained the current third-party manager, an affiliate of Spectrum Retirement Communities, LLC, to manage the properties. 

Matt Pyzyk, Managing Director of Acquisitions for GCP, originated these transactions and is leading the Company’s effort to buy high-quality age-restricted apartments and independent living communities in desirable markets throughout the United States.

Commenting on the transaction, Mr. Pyzyk stated, “We are very excited about the completion of this acquisition, which marks a significant step forward in the expansion of our rapidly growing senior housing portfolio. These assets provide a solid complement to the existing portfolio and we expect them to continue to be strong performers for many years.” 

Green Courte Partners is a Chicago-based real estate private equity investment firm focused on building industry-leading companies within niche real estate asset classes, including parking and specialty housing.

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JERSEY CITY, NJ – Building and Land Technology (BLT) announced that The Hague, the sixth and final apartment building within The Beacon luxury apartment complex in Jersey City, has fully leased up within six months of its introduction. With this milestone achieved, The Beacon apartment complex is now stabilized in its entirety following a massive historic preservation and renovation effort, and is now home to nearly 2,000 residents in its 1,155 rental units.

The Beacon, listed on both the New Jersey and National Registers of Historic Places, represents one of the largest historic renovations ever completed in the country and stands as New Jersey’s largest example of Art Deco-style architecture. The property was originally built in early 20th century as the Jersey City Medical Center and has been completely re-purposed and restored into an unparalleled modern living experience. With over 95 percent of the apartments now leased and all construction completed, The Beacon is now a vibrant, urban residential destination with an outstanding package of amenities.

“It has been gratifying to play a role in bringing this incredible property back to life,” said Paul MacKnight, Jr., Residential Portfolio Director for Building and Land Technology. “The extraordinary response from residents says it all. The rapid leasing velocity for such a substantial number of apartments exceeded our expectations and underscores the appeal of the product we made. At an attractive price point, our residents are enjoying a complete lifestyle package with perfectly designed apartments and unrivalled amenities, as well as an incredible location with simple access to New York City.”

The Beacon’s rental residences feature studios as well as one-and two-bedroom apartments, all with unique floor plans, feature high ceilings and gourmet chef’s kitchens with granite counter tops, stainless steel appliances and garbage disposals. Baths are embellished with cultured marble vanity tops, tile floors and glass shower doors as well as individual washers and dryers. The homes are bathed in natural light with outstanding views and offer central heating and air conditioning. Found throughout the buildings are 24-7 state-of-the-art fitness centers, restored art deco theaters with oversized screens, children’s playrooms, resident lounges, Wi-Fi in common areas and landscaped courtyards with fire pits.

Located on one of the highest points in Jersey City, The Beacon residents delight in a tremendous amount of private outdoor space, with a 45,000 square-foot landscaped park featuring seating areas, fire tables, and grills set against the panoramic backdrop of the Manhattan skyline and New York Harbor.  There is also a two-acre park with children’s playground, organic garden and expansive dog runs. 

Residents of The Beacon delight in access to complimentary high-frequency shuttle service to the Grove Street and Exchange Place PATH/Ferry Stations, and are close to Jersey City’s downtown district, which includes NY Waterway Ferry terminals and PATH stations, as well as restaurants, cafes, coffee houses and cultural attractions. In addition, the Citi Bike Jersey City bike sharing program has a station at The Beacon.  

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