LPS Home Price Gains Match Case-Shiller; Appreciation Accelerating

by devteam May 29th, 2013 | Share

The latest in the monthly rollout ofrnreports on the housing sector’s recovery, as reflected in house prices, camerntoday with Case Shiller earlier and continued with Lender Processing Services’ (LPS) Home Price Indexrn(HPI).  Whilernthe methodology and data sources for each report are different and the actualrnnumbers vary, the LPS report confirms the same trajectory as has each of thernother monthly and annual numbers reported this month; prices are coming backrnand coming back strongly.</p

LPS reports that its HPI for March was uprn1.4 percent from the February number to $213k.  This number is based on a repeat salesrnanalysis of home prices at closing for transactions in each of more than 15,500rnZIP codes.  LPS represents the price ofrnnon-distressed sales by taking into account discounts for distressedrnsales.  </p

The LPS HPI is up 2.9 percent thus farrnin 2013 and has increased 7.6 percent since March 2012.  The company reports that prices as reflectedrnby its index are down 19.5 percent from the peak of $265 in June 2006.</p

The LPS month-over-month increase of 1.4rnpercent in March is identical to both the 10- and 20-City Composites issued byrnS&P this morning and only one basis point higher than the Home Price Indexrnpublished last week by the Federal Housing Finance Agency from Freddie Mac andrnFannie Mae transactions.   CoreLogic reportedrnan even stronger increase; its index that includes sales of REO and short salesrn(distressed sales), rose 1.9 percent in March and 2.4 percent with distressedrnsales excluded.</p

Estimates of annual price changes fellrninto two distinct groups with FHFA and LPS substantially more conservative inrntheir estimates than the others.  FHFA reportedrnan annual increase of 6.7 percent while LPS, as reported above, estimated a 7.6rnpercent annual rise.  A cluster of higherrnestimates came from S&P Dow Jones, up 10.3 percent for the 10-City Indexrnand 10.9 percent for the 20-City; the National Association of Realtors® (NAR)rnwhich reported a 11.0 percent increase in median existing home prices, and CoreLogicrnwhich said its index with distressed sales rose 10.5 percent and the indexrnwithout those sales was up 10.7 percent.</p

February and March 2012 are variouslyrnreported at the months during which home prices bottomed out nationally so thisrnmonth’s reports are the first showing a solid 12 months of price increases nationallyrnin probably more than seven years.  Whatrnis intriguing about these reports, in addition to their substantial unanimity overrnthe last few months, is the acceleration of the increases over the last monthrnor two even before the traditionally strong spring market begins to bernreflected in the data.    </p

LPS, for example, reports a 2.9 percentrnincrease since January, more than a third of the annual increase in two months.  Twenty percent of the total annual increasernof 6.7 percent reported by FHFA was -posted in March as was 14 percent of the increasernin the S&P Dow Jones 10-City Index and 13 percent of the 20-City. </p

Today’s LPS release also reported that<bevery state in the nation posted an increase in home prices in March, with therngreatest change in Georgia (2.6 percent), Nevada (2.4 percent), the District ofrnColumbia (2.2 percent) Washington and Illinois (2.1 percent each).   At the low end were Rhode Island andrnTennessee, both up 0.6 percent, Texas, Oklahoma, Vermont, and Pennsylvania allrnat 0.7 percent.</p

All 40 of the metropolitan areas coveredrnin the report were also in positive territory for the month with the largestrnprice increases in San Jose (3.0 percent), Atlanta and Las Vegas (2.6 percent)rnand San Francisco and Deltona Florida (2. Percent).  Memphis had the smallest increase at 0.2rnpercent followed by York, Pennsylvania, Chattanooga, Harrisburg, and SanrnAntonio, all at 0.4 percent.

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About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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