Biggest Home Price Gains Since Collapse; Potential Shift Ahead
Another firm has weighed in with an index that
confirms both the continuation of the better than year-long housing price gains
and that the price performance is beginning to moderate. The latest,
FNC's Residential Price IndexTM (RPI), shows both a substantial increase in
home prices during the third quarter of 2013 but also a broadening of the
housing recovery across the country. The RPI increased 2.5 percent
between the second and quarters, making the most recent quarter's growth the
fastest in the current recovery.
FNC said rising home sales accompanied by a
relatively low share of foreclosure re-sales are the key drivers of continued
increases in home prices. As of September, foreclosure sales nationwide
accounted for 13.4% of total home sales, up slightly from August's 12.7% but
down from 16.6% a year ago.
The typical winter slowdown in housing demand is
expected to curtail price increases in the coming months. FNC points to one
sign of slower growth ahead, the leading October sales-to-list price ratio fell
to 96.0 from 96.5 in July and August.
On a monthly basis the increase in FNC's composite
covering the 100 largest metropolitan areas increased by 0.5 percent. In
another indication of moderating momentum the September price increase was
lower than either of the previous months in the quarter. The 100-MSA
composite increased a modest 5.2 percent from a year ago and the 30-MSA and
10-MSA composites exhibit similar month-over-month price patterns but faster
accelerations in year-over-year growth at 6.7 and 6.8 percent
respectively. FNC's composites are based on recorded sales of
non-distressed properties, both new and existing homes.
Prices rose by August to September in 27 of the
cities in the 30-MSA index with Miami, Baltimore, Charlotte, North Carolina; and
Riverside, California each posting growth of about 20 percent. Home
prices in Denver declined for the second month in a row and the city's
foreclosure sales picked up slightly in recent months. St. Louis saw a
significant uptick in foreclosure sales from 19.5 percent in September 2012 to
30 percent this September and a 1.3 percent drop in home prices.
Fifty of the 100 MSAs have shown double digit price
growth since early 2012 with some of the best numbers turned in by markets that
were in high distress a few years earlier such as Phoenix, Las Vegas,
Riverside, Los Angeles and Orlando. The 100-MSA composite showed an 11.0
percent cumulative price recovery nationwide.
FNC's RPI is a hedonic price index built on a
comprehensive database that blends public records of residential sales prices
with real-time appraisals of property and neighborhood attributes. As a gauge
of underlying home values, the RPI excludes sales of foreclosed homes, which
are frequently sold with large price discounts, reflecting poor property
conditions.
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