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More Than Half of the Home Price Bounce Fell Within 12 Months

by devteam May 13th, 2014 | Share

Homernprices reached the half-way mark in the fourth quarter of 2013, climbing backrnto a level 20 percent above the trough in values reached nationwide in thernfourth quarter of 2011 but remaining 21 percent below the peak prices reachedrnin early 2006.  The CoreLogicrnCase-Shiller Indexes for the last three months of 2013 confirmed that more thanrnhalf of that appreciation occurred between the fourth quarter of 2012 and thernfourth quarter of 2013 when  pricesrnincreased by 11.3 percent nationwide.</p

ThernCase-Shiller analysis paints a more restrained picture going forward.   Pricernappreciation over the four quarters of 2014 will be at less than half that in 2013,rnslowing to 5.3 percent over the course of the year.  Even this decreased rate is slightly higherrnthan the historic rate of 4.5 percent recorded since 1975. </p

“Limited construction of new homes and lowrninventories of existing homes for sale contributed to the jump in prices,” saidrnDr. David Stiff, principal economist for CoreLogic Case-Shiller. “Developersrnremain cautious about building too many new houses until they see strongerrndemand in their markets.”</p

ThernCase-Shiller analysis covers home price trends during the fourth quarter of 2013 in more than 380rnU.S. markets.  Among the largestrnmetropolitan areas, those with populations over 950,000, the most rapid growthrnwas noted in Las Vegas (+26 percent) and Riverside (+24 percent) and Oaklandrn(+23 percent) California. The three largest metropolitan areas that experiencedrnno change were Oklahoma City, and Tulsa, Oklahoma and Virginia Beach, Virginia.  Stiff said that new price peaks, even abovern2006 levels were reached in several metro areas including Houston, Dallas,rnDenver, Honolulu, and Pittsburgh. </p

Of the largest metropolitan areas Case-Shillerrnprojects the greatest year-over-year gains through the end of 2014 for Tucson, (+11rnpercent), Rochester, New York (+9 percent) and Hartford (+9 percent). The largestrnmetropolitan areas with the smallest projected gains are Nashville (+2 percent),rnSacramento (+2 percent) and Warren, Michigan (+2 percent).</p

“For the remainder of 2014, investor demand andrnsales of foreclosed properties should drop off quickly. Traditional buyers arernreturning slowly to the market, but cannot replace demand from investors who ledrnthe market in recent years,”rnDr. Stiff said.

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About the Author

devteam

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

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