Biggest Home Price Gains Since Collapse; Potential Shift Ahead

Another firm has weighed in with anrnindex that confirms both the continuation of the better than year-long housingrnprice gains and that the price performance is beginning to moderate.  The latest, FNC’s Residential Price Index^{TM</sup(RPI), shows both a substantial increase in home prices during the thirdrnquarter of 2013 but also a broadening of the housing recovery across therncountry.  The RPI increased 2.5 percentrnbetween the second and quarters, making the most recent quarter’s growth thernfastest in the current recovery. </p}

FNC said rising home sales accompaniedrnby a relatively low share of foreclosure re-sales are the key drivers ofrncontinued increases in home prices. As of September, foreclosure salesrnnationwide accounted for 13.4% of total home sales, up slightly from August’srn12.7% but down from 16.6% a year ago. </p

The typical winter slowdown in housingrndemand is expected to curtail price increases in the coming months. FNC pointsrnto one sign of slower growth ahead, the leading October sales-to-list pricernratio fell to 96.0 from 96.5 in July and August.</p

On a monthly basis the increase in FNC’srncomposite covering the 100 largest metropolitan areas increased by 0.5rnpercent.  In another indication ofrnmoderating momentum the September price increase was lower than either of thernprevious months in the quarter.  Thern100-MSA composite increased a modest 5.2 percent from a year ago and the 30-MSArnand 10-MSA composites exhibit similar month-over-month price patterns butrnfaster accelerations in year-over-year growth at 6.7 and 6.8 percentrnrespectively.  FNC’s composites are basedrnon recorded sales of non-distressed properties, both new and existing homes.</p

Prices rose by August to September in 27rnof the cities in the 30-MSA index with Miami, Baltimore, Charlotte, NorthrnCarolina; and Riverside, California each posting growth of about 20 percent.  Home prices in Denver declined for the secondrnmonth in a row and the city’s foreclosure sales picked up slightly in recentrnmonths.  St. Louis saw a significantrnuptick in foreclosure sales from 19.5 percent in September 2012 to 30 percentrnthis September and a 1.3 percent drop in home prices.  </p

Fifty of the 100 MSAs have shown double digitrnprice growth since early 2012 with some of the best numbers turned in byrnmarkets that were in high distress a few years earlier such as Phoenix, LasrnVegas, Riverside, Los Angeles and Orlando. rnThe 100-MSA composite showed an 11.0 percent cumulative price recoveryrnnationwide.</p<pFNC's RPI is arnhedonic price index built on a comprehensive database that blends publicrnrecords of residential sales prices with real-time appraisals of property andrnneighborhood attributes. As a gauge of underlying home values, the RPI excludesrnsales of foreclosed homes, which are frequently sold with large pricerndiscounts, reflecting poor property conditions.

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