Home Values Archives - George L. Duarte

Home prices increased in November, with national home prices up 0.70 percent month-to-month and 6.20 percent higher year-over year. Case-Shiller’s 20-City Home Price Index rose by 0.70 percent in the three-month period ending in November; nationally, home prices grew 6.20 percent year-over-year.

Seattle, Washington held first place in home price growth with a year-over-year increase of 12.70 percent. Las Vegas, Nevada home prices followed with year-over-year home price growth of 10.60 percent. San Francisco, California home prices grew by 9.10 percent year-over-year. Slim supplies of homes for sale drove rising home prices and sidelined would-be borrowers as affordability remained out of reach.

Home Prices Get a Pre-Recession Do-Over in Some Cities

David M. Blitzer, Chairman of the S&P Dow Jones Indices Committee, said that Los Angeles and San Diego, California along with Las Vegas, Nevada and Miami, Florida are repeating fast-paced price gains that they had prior to the recession.

Mortgage Rates, Building Costs Impact Supply of Homes and Affordability

Combined effects of high mortgage rates and rapidly rising home prices could dampen buyer enthusiasm over time, but the time-worn proclamation that what goes up must come down has not applied to home prices in high demand metro areas. Home buyers may rush to close their home loans before rates rise, but more buyers may delay buying a home due to few options, higher home prices and rising rates.

Lower taxes and rising wages may encourage renters to buy homes, but home prices continued to outstrip income for many potential buyers.

Building more homes is the only relief in sight for low inventories of homes for sale, but builders face rising materials costs, shortages of lots suitable for building and insufficient workers. Other factors impacting home building and buying homes include poor weather in some areas during December, and further shortages of homes caused by natural disasters in 2017.

2018 may see high-priced local areas develop affordable homeownership programs as current prices continue to rise above interested buyers’ financial resources.

Case-Shiller Index November 2012 Home prices continue their upward climb.

Last week, the S&P/Case-Shiller Index showed home prices gaining 5.5 percent during the 12-month period ending November 2012, marking the largest one-year gain in home prices since May 2010.

The Case-Shiller Index measures changes in home prices by tracking same-home sales throughout 20 housing markets nationwide; and the change in sales price from sale-to-sale.

Detached, single-family residences are used in the Case-Shiller Index methodology and data is for closed purchase transactions only.

Between November 2011 and November 2012, home values rose in 19 of the 20 Case-Shiller Index markets, with previously-hard hit areas such as Phoenix, Arizona leading the national price recovery.

The Phoenix market gained 1.4% for the month and was up 22.8% for the previous 12 months combined.

The top three monthly “gainers” for November 2012 were:

Phoenix, Arizona : +1.4 percent
San Francisco, California : +1.4 percent
Minneapolis, Minnesota : +1.0 Percent

Only New York City posted annual home value depreciation. On average, homes lost -1.2% in value there.

It should be noted, however, that the Case-Shiller Index is an imperfect gauge of home values.

First, as mentioned, the index tracks changes in the detached, single-family housing market only. It specifically ignores sales of condominiums, co-ops and multi-unit homes.

Second, the Case-Shiller Index data set is limited to just 20 U.S. cities. There are more than 3,000 cities nationwide, which illustrates that the Case-Shiller sample set is limited.

And, lastly, the home sale price data used for the Case-Shiller Index is nearly two months behind its release date, rendering its conclusions somewhat out-of-date.

That said, the Case-Shiller Index joins the bevy of home value trackers pointing to home price growth over the last year. The Federal Housing Finance Agency (FHFA), for example, reported similar home price growth with its November 2012 House Price Index (HPI).

Home values rose 0.6 percent between October and November 2012 nationwide, the FHFA said, and climbed 5.6 percent during the 12 months ending November 2012.

Economists attribute increasing home prices to higher buyer demand, record-low mortgage rates and the gradual improvement of the U.S. economy.