PRICES GAIN AS SPRING SEASON NEARS
Great Post from the DS NEWS by Esther Cho
National home prices continued to post strong annual gains into February, while quarterly increases stabilized, Clear Capital reported Tuesday.
Home prices in February were up 6.1 percent year-over-year, the strongest yearly growth since August 2010 when the home buyer tax credit influenced demand, according to Clear Capital’s Home Data Index (HDI).
The robust yearly gains, however, are expected to ease since they’re compared to market lows.
“While February’s yearly growth of 6.1% is encouraging, let’s keep in mind this rate of growth is measured against the market’s bottom, which we reported in our March 2012 Market Report,” said Dr. Alex Villacorta, director of research and analytics at Clear Capital.
Quarter-over-quarter, national home prices grew as well, rising at a slower, but perhaps more normal pace.
“Consumer confidence continues to be vital to a broader housing recovery, and national quarterly home prices expanding 1.0% in the midst of winter is confirmation the recovery has legs. While 1.0% is weaker in comparison to more recent rates of quarterly growth, the positive trend continues to support homebuyer confidence and is on par with the new normal,” Villacorta added.
Despite the winter season, all four regions managed to move in a positive direction, though the quarterly gains were mostly flat for all regions except the West, where prices rose 2.1 percent quarter-over-quarter. The South, Northeast, and Midwest saw increases of 0.8 percent, 0.7 percent, and 0.4 percent, respectively.
The West also led other regions with its year-over-year gain of 13.6 percent. In the South, prices rose 5.1 percent during the same time period, while the Midwest saw a 4 percent gain and the Northeast a 2.6 percent increase.
After tracking performance among metro areas, Clear Capital found the strongest metros were able to sustain price gains into February, while the bottom performing markets began to see a quarterly descent in prices.
The metro areas that posted the strongest quarterly gains were Atlanta (+3.5 percent), Las Vegas (+3.4 percent), Phoenix (+3.3 percent), Sacramento (+3.1 percent), and Houston (+2.7 percent). With the exception of Houston, the metros in the top five also posted double-digit increases year-over-year.
According to Clear Capital, 11 out of 15 of the lowest performing metros experienced price declines in February quarter-over-quarter, though nine of the 11 metros fell less than half a percent.
The metros that posted the biggest quarterly declines were Columbus (-1.2 percent), Detroit (-0.9 percent), Charlotte (-0.4 percent), St. Louis (-0.4 percent), and Raleigh, North Carolina (-0.3 percent).
Despite the quarterly price decreases among the 11 metros, Clear Capital noted just six of the markets saw home values decline over a one-year period.
“Overall, the U.S. housing market continued to hold up well in February and with spring just around the corner, we head into the more active home buying season on solid ground,” Clear Capital concluded.