Home Prices Rise by More Than 12 Percent; Where Are the Hot Markets? Following its predicted forecast, the housing recovery continues to push forward as we move from spring to summer. CoreLogic recently released its April CoreLogic HPI report showing an increase in home prices nationwide of 12.1 percent on a year-over-year basis in April 2013 compared to April 2012. This monumental change represents the biggest year-over-year increase since February 2006 and the 14th consecutive monthly increase in prices nationally. On a month-over-month basis, including distressed sales, home prices increased by 3.2 percent in April 2013 compared to March 2013. “House price growth continues to surprise to the upside with an impressive 12.1 percent gain year over year in April,” says Dr. Mark Fleming, chief economist for CoreLogic. “Increasing demand for new and existing homes, coupled with low inventory, has created a virtuous cycle for price gains, most clearly seen in the Western states with year-over-year gains of 20 percent or more.” Including distressed sales, the five states with the highest home price appreciation were: • Nevada (+24.6 percent) • California (+19.4 percent) • Arizona (+17.3 percent) • Hawaii (+17 percent), and • Oregon (+15.5 percent) “Although the nature of real estate as a cyclical industry implied a recovery on the other side of the correction, the pace of improvement in the fundamentals and the shift in demand vs. supply over the last 12 months has exceeded the expectations of most everyone,” says Budge Huskey, president and CEO, Coldwell Banker Real Estate LLC. “While values remain well below their peak on a national level, implying additional room for growth, year-over-year increases in many markets are dramatic and the significant drop in inventory has triggered a rapid shift from a buyer’s to seller’s market.” Further supporting these reports, Clear Capital recently released its Home Data Index(TM) (HDI) Market Report with data through May 2013. Results here also show many markets are improving nationwide, including Phoenix and Las Vegas. In Las Vegas yearly gains ramped up to 27 percent, surpassing the yearly gains of 25.7 percent in Phoenix to lead the nation’s real estate recovery. This is the first time in over a year–since April 2012–that Phoenix has not led the top 50 major metro markets in yearly gains. While Las Vegas yearly gains continue to gain momentum, the market is still lagging behind. Current prices remain 57.1 percent below the peak and would need to rise a whopping 133.3 percent to reach peak values. “May home price trends confirm the recovery continues to mature,” says Dr. Alex Villacorta, vice president of research and analytics at Clear Capital. “While there’s no questioning the validity of the recovery at this point, performances at the local level remained mixed when considering strength, sustainability and relative positions to 2006 prices. For example, Las Vegas’ strong yearly gains represent a rebound from a severe correction rather than bubble-like price growth.” The real estate regrowth in Las Vegas—and all of Nevada—hints at not only a healing housing market, but a recovering economy overall. “Southern Nevada as a whole is poised perfectly for recovery with both sales volume and prices steadily increasing over the past three years,” says Mark Stark, CEO Prudential Americana Group. “As we recover and create jobs, REOs and short sales have become a significantly smaller part of our business. In fact, more than 90 percent of all currently available homes in Southern Nevada are non-distressed, traditional homes with equity. Further evidence of spring’s slightly positive impact: Severity of quarterly declines in the lowest performing markets subsided slightly in May, where only six out of 15 of the lowest performing markets saw declines and five of those saw less than 1.0 percent in losses. Nationwide, Spring buying activity started to take marginal effect on short-term price trends as quarterly, national and regional gains saw a slight uptick over April. The West, South, Northeast and Midwest saw quarterly gains of 2.4%, 1.1%, 0.8% and 0.7%, respectively. Nationally, home prices saw a 1.3% quarterly gain, while yearly gains expanded to 8.2%. The yearly growth rate picked up a full 1.0 point over April’s rate of 7.2% growth. As noted in past reports, these noteworthy gains on the yearly metric can’t completely be attributed to current momentum; rather they are, in part, a result of the low price floor seen one year ago.
Posted on: Mon, 10 Jun 2013 23:42:06 +0000