by Bill McBride on 6/05/2014 01:31:00 PM
Thursday, June 05, 2014
From Trulia chief economist Jed Kolko: Home Price Gains Finally More Balanced, Sustainable, and Widespread
Asking home prices rose at their slowest rate in 13 months, rising just 8.0% year-over-year (7.2% excluding foreclosures). Although this year-over-year increase is slower than in previous months, an 8.0% increase is still far above the long-term historical norm for home-price appreciation. Furthermore, prices continue to climb in the most recent quarter: the 2.4% quarter-over-quarter increase in May 2014 is equivalent to 9.9% on an annualized basis. Finally, price gains continue to be widespread, with 93 of the 100 largest metros clocking quarter-over-quarter price increases, seasonally adjusted.Here is the slowdown: In November 2013, year-over-year asking prices were up 12.2%. In December, the year-over-year increase slowed slightly to 11.9%. In January 11.4%, in February 10.4%, in March 10.0%, April 9.0% and now in May 8.0%.
Nationally, asking home prices are rising slower than in previous months, but the real change has been the price slowdown in the hyper-rebounding markets of the West. In May 2014, none of the 100 largest metros had a year-over-year price gain of more than 20%; the steepest increase was 18.8%, in Riverside-San Bernardino. Among the markets with the biggest price gains today, three – Las Vegas, Sacramento, and Oakland – have had significant slowdowns in year-over-year gains, from around 30% in May 2013 to around 15% in May 2014. In contrast, price gains accelerated dramatically in Chicago, up 13.5% year-over-year in May 2014 versus just 3.6% in May 2013. Overall, half of the top 10 markets with the largest price gains are outside the West, another big change from last year when almost all of the biggest price increases were in the West.
Rents are up 5.1% year-over-year nationally, with apartment rents up 5.8% and single-family rents up 2.1%.
This suggests prices are still increasing, but at a slower pace.
Note: These asking prices are SA (Seasonally Adjusted) - and adjusted for the mix of homes - and this suggests further house price increases, but at a slower rate, over the next few months on a seasonally adjusted basis.
Posted by Bill McBride on 6/05/2014 01:31:00 PM