Home values across the country are increasing, as are home sales. Sales volume might be even higher if it weren’t for limited housing supply. Markets in Arizona, Florida and Texas are all among areas expected to see solid home-price appreciation this year. Some east coast markets, however, aren’t expected to fare so well.
Average appreciation for the top 100 metropolitan areas is forecasted by Veros Real Estate Solutions to be 1.2 percent during the next 12 months. It was the second consecutive quarter Veros has projected an increase. The prediction reflects activity in 975 counties, 335 metro areas, and 13,586 zip codes.
“Highly notable is the re-emergence of several very strong market forecasts, with Phoenix appearing again as the top market with over 10 percent annual appreciation predicted,” the report said. “This is the first time since 2006 that Veros has forecast double-digit annual appreciation in any market.”
The 9.1 percent appreciation expected in Midland, Texas, this year is the second best. Miami followed with 7.8 percent appreciation forecasted, then Tampa, Fla.’s, 6.5 percent; and Denver’s 6.2 percent.
The Poughkeepsie-Newburgh-Middletown, N.Y. market is forecasted to depreciate 3.1 percent by the end of this year. Other markets expected to depreciate at least 2 percent include Allentown-Bethlehem-Easton, Pa.-N.J.; Norwich-New London, Conn.; York-Hanover, Pa.; and Trenton-Ewing, N.J.
The Core Based Statistical Area of Austin-Round Rock-San Marcos was one of two Texas markets among the 10 best-performing markets based on the Home Value Forecast released last week by Pro Teck Valuation Services. Houston was the other Texas market in the ranking, which was determined by a market condition ranking model.
The Florida markets of Fort Lauderdale and Miami also made Pro Teck’s best list. The other markets were Baltimore; Boston; Charlotte, N.C.; Los Angeles; Minneapolis; and Seattle.
At the bottom of Pro Teck’s list were Boise City, Idaho; Little Rock, Ark.; Nassau-Suffolk, N.Y.; New Haven, Conn.; Spartanburg, S.C.; North Port-Bradenton-Sarasota, Fla.; Portland-Vancouver-Hillsboro, Ore.-Wash.; Shreveport, La.; Syracuse, N.Y.; and Toledo, Ohio.
The median U.S. home price was $180,800 in December, the National Association of Realtors reported last week. That was 11.5 percent better than a year earlier and the 10th consecutive year-over-year gain, “which last occurred from August 2005 to May 2006, and is the strongest increase since November 2005 when it jumped 12.9 percent.”
For all of 2012, the NAR’s preliminary median price for existing home sales was $176,000, climbing from $166,100 in 2011. Last year’s gain was the strongest since 12.4 percent in 2005.
Home prices increased 0.5 percent between October and November, according to the LPS Home Price Index released Monday from Lender Processing Services Inc. The index, which represents the price of non-distressed sales, combines LPS’ property and loan-level databases to generate a repeat sales analysis of home prices every month for more than 15,500 zip codes.
Compared to November 2011, the LPS index indicates that U.S. home prices have risen 5.1 percent. Since the peak reached in June 2006, home prices are down 22 percent.
The CoreLogic Home Price Index released on Jan. 15, which factors in distressed sales, was up 0.3 percent between October and November. Compared to a year earlier, the index was up 7.4 percent.
“This change represents the biggest increase since May 2006 and the ninth consecutive increase in home prices nationally on a year-over-year basis,” CoreLogic said.
When CoreLogic’s December index is released, home prices are expected to decline 0.5 percent — likely still leaving the index 7.9 percent higher than the year-earlier period.
Excluding distressed sales, home prices were up 0.9 percent from CoreLogic’s October index and 6.7 percent higher compared to November 2011.
The FNC index increased in November for the ninth consecutive month. FNC’s index was up 0.3 percent from October and 4.2 percent higher than the same month in 2011 — “the largest year-over-year increase since October 2006.”
U.S. house prices were up 0.6 percent on a seasonally adjusted basis in November compared to a month earlier in the Federal Housing Finance Agency’s House Price Index. The FHFA said that October’s price increase was revised up to 0.6 percent from 0.5 percent previously reported.
The year-over-year gain from FHFA’s index, which is based on purchase prices of homes financed by Fannie Mae and Freddie Mac, was 5.6 percent. Prices have fallen 15.2 percent from the index’s April 2007 peak.
Based on the LPS index, home prices performed best in Florida, where they rose 1.5 percent from October. All of the 10 top-performing metropolitan statistical areas were all in the Sunshine State, with Cape Coral’s 1.9 percent topping the charts.
New York was up 1.1 percent in the LPS index; while Washington, D.C., rose 1.0 percent; and Georgia and Minnesota each increased 0.9 percent.
CoreLogic’s data showed that Arizona’s 20.9 percent rise from November 2011 to November 2012 was the greatest of any state when including distressed sales. The Grand Canyon State was bolstered by Phoenix, where prices were up 24.2 percent.
Nevada was next with a 14.2 percent gain, followed by Idaho’s 13.8 percent, North Dakota’s 11.3 percent and California’s 11.1 percent.
LPS said the 0.2 percent decline in Massachusetts was the worst month-over-month decline of any state. Springfield, Mass., was the worst MSA with an 0.6 percent decline. Rhode Island had the only other decrease: 0.1 percent.
The worst year-over-year performers on CoreLogic’s list were Delaware, where prices dropped 4.9 percent; Illinois, which had a 2.2 percent decline; and Connecticut, with an 0.5 percent reduction. New Jersey had an 0.5 percent decline, while Rhode Island’s loss was 0.3 percent.
The NAR reported Monday that its Pending Home Sales Index, which provides insight into upcoming sales based on home sales contacts signed, was down 4.3 percent between November and December.
Limited supply, especially in the market for home less than $100,000, appears to be the main factor holding back contract signings, NAR Chief Economist Lawrence Yun said in the report.
But the index, however, increased 6.9 percent from the December 2011 and has risen 20 consecutive months on a year-over-year basis.
Last week, the NAR reported that December’s existing housing inventory of 1.82 million was down 8.5 percent. The inventory level represented a 4.4-month supply, improving from November’s 4.8-month supply to the lowest supply since May 2005’s 4.3-month supply. The supply was way down from 6.4 months in December 2011.
“Raw unsold inventory is at the lowest level since January 2001 when there were 1.78 million homes on the market,” the NAR’s report said.
Earlier this month, the Department of Commerce reported that privately-owned housing units authorized by building permits were at a seasonally adjusted annual rate of 903,000 in December, up 0.3 percent from the revised rate in November. Single-family permits accounted for 578,000 of last month’s total.
Annual building permits climbed to 813,400 from 624,100 issued in 2011.
The Commerce Department said that housing starts rose to a seasonally adjusted annual rate of 954,000 in December from a revised 851,000 a month earlier and 697,000 a year earlier. Housing completions, meanwhile, edged up to a seasonally adjusted annual rate of 686,000 from 675,000 and were 606,000 in December 2011.
The Realtor’s report indicated existing home sales declined to a seasonally adjusted annual rate of 4.94 million in December from a revised 4.99 million rate in November. Still, existing home sales — including single-family homes, townhomes, condominiums and co-ops –were 12.8 percent stronger than during the final month of 2011.
Distressed sales accounted for 24 percent of last month’s activity. The distressed share, which reflects foreclosures and short sales, widened from 22 percent the prior month but narrowed from nearly a third in the same month during the prior year.
Cash sales represented 29 percent of December’s activity, while first-time buyer share was 30 percent.
Annual home sales climbed to 4.65 million last year from 4.26 million in 2011 — the strongest level since 5.03 million in 2007.
“Although tight inventory is limiting home sales in many areas, overall sales are expected to stay on an upward trend,” NAR President Gary Thomas said in the trade group’s report. “The biggest impact of tight inventory is upward pressure on home prices, but after values fell below replacement construction costs, prices are still affordable in most of the country.”
Single-family new home sales, meanwhile, were up 4.4 percent in November to a seasonally adjusted annual rate of 377,000 units, the National Association of Home Builders Announced last month. The report indicated that it was the highest monthly total since April 2010 when the federal home buyer tax credit expired.
NAHB Chief Economist David Crowe estimated there will be around 365,000 new-home sales in 2012, an increase of almost 20 percent over 2011.
The National Association of Home Builders/Wells Fargo Housing Market Index was 47 in January, the same as in December. But the index remains at its highest level since April 2006.
“Builders’ sentiment remains very close to the index’s tipping point of 50, where an equal number of builders view conditions as good and poor, and fundamentals indicate continued momentum in housing this year,” NAHB Chief Economist David Crowe in the report released earlier this month. “However, persistently tight mortgage credit conditions, difficulties in obtaining accurate appraisals and the ongoing stalemate in Washington over critical economic concerns continue to impede the housing recovery.”