Tight Inventories Continue to Spur Price Gains

The numbers of homes for sale in a few areas of the countryrnhave now dropped below a two month supply CoreLogic said today.  Prices in cities with these tight inventoriesrnhave appreciated faster than the rest of the country, but supplies are limited throughrnmuch of the nation.</p

The company said that its Home Price Index (HPI) for June,rnshows that nationwide home prices, including distressed sales, were up 6.5rnpercent compared to June 2014, the 40^th consecutive month of annualrnprice gains.  The index increased by 1.7rnpercent from May to June.</p

Including distressed sales the peak-to-current change in thernnational HPI (from April 2006 to June 2015) was -7.4 percent. Excludingrndistressed transactions, the peak-to-current change for the same period was -4rnpercent.</p

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Thirty-five states and the District of Columbia were at orrnwithin 10 percent of their peak prices in June and 15 states and the Districtrnof Columbia established new price peaks-Alaska, Arkansas, Colorado, Hawaii,rnIowa, Kentucky, Nebraska, New York, North Carolina, North Dakota, Oklahoma,rnSouth Dakota, Tennessee, Texas and Wyoming. </p

The five states with the highest home price appreciation onrnthis index were: Colorado (+9.8 percent), Washington (+8.9 percent), New Yorkrn(+8.3 percent), South Carolina (+8 percent) and Nevada (+8 percent).</p

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Year-over-year prices fell in four states, most notably inrnMassachusetts where prices including distressed sales were down 5.0rnpercent.  Home prices dipped 0.6 percentrnin Connecticut, 0.4 percent in Louisiana, and 0.3 percent in Mississippi. Marylandrnprices were unchanged. </p

Excluding distressed sales, home prices increased by 6.4rnpercent in June 2015 compared with June 2014 and were up 1.4 percent compared withrnMay 2015. Excluding distressed sales, only Massachusetts (-1.5 percent) andrnLouisiana (-0.1 percent) showed year-over-year depreciation in June. Distressedrnsales include short sales and real estate-owned (REO) transactions.</p

“The tightness of the for-sale inventory varies acrossrncities. Throughout the U.S., the months’ supply was 4.8 months in the CoreLogicrnhome-listing data for June, but varied greatly across cities. In San Jose andrnDenver, there was only 1.6 months’ supply of homes on the market, whereasrnPhiladelphia had a 7 months’ supply and Providence had a 6.6 months’ supply,”rnsaid Frank Nothaft, chief economist for CoreLogic. “The stronger appreciationrnwas registered in cities with limited inventory and strong homebuyer activity,rnsuch as San Jose and Denver.” </p

CoreLogic’s forecast for home prices is a 0.6 percentrnincrease in its index including distressed sales from June to July 2015 and arn4.5 percent gain over the June 2015 to June 2016 period.  </p

It projects the HPI which excludes distressed sales willrnrise 0.5 percent on a month to month basis and by 4.2 percent over the 12rnmonths ending next June.  The CoreLogicrnHPI projections are derived from state-level forecasts by weighting indicesrnaccording to the number of owner-occupied households for each state.</p

“The current cycle of home price appreciation is closing inrnon its fourth year with no apparent end in sight,” said Anand Nallathambi,rnpresident and CEO of CoreLogic. “Pent-up buying demand and affordability,rntogether with higher consumer confidence buoyed by a more robust labor market,rnare a potent mix fueling a 6.5 percent jump in home prices through June withrnmore increases likely to come.” </p

Of the top 100 Core Based Statistical Areas (CBSAs) measuredrnby population, 93 showed year-over-year increases. The seven CBSAs that did notrnwere Baltimore (-8 percent); Boston (-4.4 percent); Camden, NJ (-0.5); Hartfordrn(-0.1 percent); New Haven-Milford, (-1.8); New Orleans (-6.1 percent) and Worcester,rnMassachusetts (-7 percent).

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