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Home Price Increases Narrowing but Remain Broad-Based
Home prices fell slightly in Septemberrncompared to the previous month CoreLogic said on Tuesday, but continued tornincrease on a year-over-year basis. Therncompany’s Home Price Index including distressed sales was down 0.1 percent fromrnits August level but, continuing a 31 month-long trend, was up 5.6 percent fromrnSeptember 2013. Increases however are nornlonger in the double digits. The HPIrnwhich excludes distressed sales rose 5.2 percent compared to the previous yearrnand was up 0.1 percent from August. </p
Home prices including distressed sales werernhigher in every state and the District of Columbia than a year earlier. Michigan and Montana had double digit growthrn(10.3 and 10 percent respectively) and the HPI hit new price peaks in fivernstates, Colorado, Nebraska, North Dakota, South Dakota, and Texas. Twenty-eight states and the District are atrnor within 10 percent of their past price peaks.</p
Forty-nine states and the District ofrnColumbia had annual increases in their HPI’s excluding distressed sales whichrninclude bank owned real estate and short sales. rnMississippi’s HPI fell 0.9 percent.</p
Inrnaddition to Michigan and Montana the states with the greatest annual increases</bin the HPI including distressed sales were Mainern(+9.6 percent), Massachusetts (+8.8 percent) and California (+8.5 percent). When distressed sales are excluded thernstrongest showings were in Maine (+10.4 percent), Massachusetts (+9.7 percent),rnCalifornia (+7.6 percent), Texas (+7.4 percent) and Michigan (+7.2 percent).</p
Price growth continues to be broad-based. Ninety-six of the top 100rnCore Based Statistical Areas (CBSAs) measured by population showedrnyear-over-year increases in September 2014. The four that did not werernRochester, Little Rock, New Haven and Hartford. </p
Including distressed transactions,rnthe peak-to-current change in the national HPI (from April 2006 to Septemberrn2014) was -12.6 percent. Excluding distressed transactions, the peak-to-currentrnchange in the HPI for the same period was -9.1 percent. Many states still greatly exceed thesernpeak-to-current numbers with Nevada still down 36.6 percent, Florida 34.1rnpercent below its peak and Arizona, Rhode Island, and Maryland still down morernthan 20 percent.</p
“There has been a clearrnbifurcation in home price growth for lower-end versus upper-end properties inrn2014,” said Sam Khater, deputy chief economist at CoreLogic. “As ofrnDecember 2013, both lower-end and upper-end property prices were up 9.7 percentrnon a year over year basis. As of September, lower-end prices were up 9.4rnpercent but upper-end prices were up only 4.5 percent.”</p
“Home prices continue to riserncompared with this time last year but the rate of growth is clearly slowing asrnwe exit 2014,” said Anand Nallathambi, president and CEO of CoreLogic.rn”With more positive macro-economic trends emerging in the U.S., we arernforecasting moderate price growth for 2015.”</p
The CoreLogic HPI Forecast referredrnto by Nallathambi indicates that home prices, including distressed sales, are<bprojected to increase 0.1 percent month over month from September 2014 tornOctober 2014 and from September 2014 to September 2015 by 5 percent. Excludingrndistressed sales, home prices are expected to rise 0.1 percent month over monthrnand by 4.6 percent year over year. </p
The CoreLogic HPI Forecast is arnmonthly projection of home prices using the CoreLogic HPI and other economicrnvariables. Values are derived from state-level forecasts by weighting indicesrnaccording to the number of owner-occupied households for each state.
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Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.
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