Monday, November 05, 2012

Trulia: Asking House Prices increased in October

by Bill McBride on 11/05/2012 11:59:00 AM

Press Release: Trulia Reports October Asking Prices Rise 2.9% Year-over-Year, But Rents Rise Faster at 5.1%

In October, asking prices rose 0.7% month-over-month, for a 2.9% year-over-year increase – the biggest yearly gain in the Trulia Price Monitor to date. More than two thirds of large metros – 69 out of 100 – had year-over-year price increases. The month-over-month and quarter-over-quarter price increases are larger when foreclosures are included than when they’re excluded – which means foreclosure prices are now rising faster than prices on non-distressed homes.
Rents Up 5.1% Year-over-Year – and Rising Even in Markets Where Prices are Falling

Rents have increased year-over-year in 24 of the 25 largest rental markets – all except Las Vegas. Rents are rising alongside big price gains in Oakland, Denver, and San Francisco; people looking for a home in these markets will find bargains disappearing whether they’re looking to rent or own. But rents are also rising sharply in Chicago and Philadelphia, despite falling for-sale prices.
“Continued widespread price increases are good for homeowners but not for home-seekers,” said Jed Kolko, Trulia’s Chief Economist. “For homeowners, rising prices add to their wealth and help bring underwater borrowers closer to positive equity. For home-seekers, however, rising prices could put homeownership out of reach. In markets like Denver, San Francisco, and Oakland, where prices and rents are both rising, higher prices mean higher down payments, but rising rents make it harder to save enough.”
These asking prices are SA (Seasonally Adjusted) - and adjusted for the mix of homes - and this suggests further house price increases over the next few months on a SA basis.

More from Jed Kolko, Trulia Chief Economist: Asking Prices Rise Yet Again in October, But Rents Rise Faster