IRVINE, CA - CoreLogic, a leading residential property information, analytics and services provider, today released an analysis of home price trends during the second quarter of 2013 in more than 380 U.S. markets based on the CoreLogic Case-Shiller Indexes.
The CoreLogic Case-Shiller Indexes estimate that home prices increased by 10.1 percent in the second quarter of 2013 compared to a year ago. Home prices nationwide are now 16 percent above the trough, reached in the fourth quarter of 2011, but still remain 24 percent below the peak, reached in the first quarter of 2006. The analysis projects that price appreciation will decelerate through the second half of 2013 and into the beginning of 2014. Based on CoreLogic Case-Shiller data forecast through June 30, 2014, home price appreciation will slow to an average of 5.4 percent across all U.S. markets.
"Prices are now rising in nearly 90 percent of metro areas, and in all metro areas with populations greater than 1 million," said Dr. David Stiff, principal economist for CoreLogic Case-Shiller. "The strongest growth continues to be recorded in cities that were at the center of the housing bubble, but investor demand in those markets appears to be waning, meaning rapid rates of price appreciation are likely unsustainable."
Of the metro areas that felt the greatest impact from the housing bubble, Sacramento (+26 percent), Las Vegas (+25 percent) and Phoenix (+20 percent) saw the largest increase in home prices during the second quarter of 2013 versus the same period last year. Coastal California markets also exhibited strong price appreciation, including Oakland (+24 percent), San Jose (+22 percent) and Los Angeles (+20 percent), as buyers continue to jump in before increasing prices and mortgage rates substantially reduce affordability.
Purchases by first-time and trade-up buyers are increasing, though tight mortgage lending conditions and slow job-market gains are constraining demand for owner-occupied housing. Demand from investors is weakening as well, as fewer distressed properties are listed for sale and rising home prices cut into potential rental profits. At the same time, the overall supply of homes for sale is still rising in many metro areas as current homeowners take advantage of favorable seller's markets.
"Combined with increased housing construction, expected increases in existing inventories should restrain price appreciation even if demand remains strong. Nevertheless, the rate of home price growth in the coming months will remain above its long-term average of 4.5 percent annual appreciation since 1975," said Dr. Stiff.
The CoreLogic Case-Shiller Indexes, which include data covering thousands of ZIP codes, counties, metro areas and state markets, are owned and generated by CoreLogic. The historical home price trend information in this report is calculated from the proprietary CoreLogic Case-Shiller Indexes, supplemented with data from the Federal Housing Finance Agency (FHFA). One-year forecasts in this release are for the 12 months ending on June 30, 2014. CoreLogic Case-Shiller home price forecasts are produced by CoreLogic and Moody's Analytics.
*This quarterly report differs from the S&P/Dow Jones Case-Shiller monthly report; though both reflect findings from the same dataset, this analysis includes local-level data for a greater number of markets over a different time frame.
The CoreLogic Case-Shiller Indexes use the repeat sales method for index calculation, analyzing data on single-family properties that have two or more recorded sales transactions. Changes in housing types and sizes, or changes in the physical characteristics, of houses are specifically excluded from the calculations to avoid incorrectly affecting the index value. The principal variable used for index calculation is the price change between two arms-length sales of the same single-family home. Sales pairs with approved data are aggregated with all other sales pairs found in a particular Census division, state, metro area, county, or ZIP code market to independently calculate each Case-Shiller index. The national index is a composite of the Case-Shiller Census division indexes. Different weights are assigned to different changes in home prices, based on their statistical distribution in that geographic region. The weighting schemes include price anomalies, high turnover frequency, time interval adjustments and initial home value. Case-Shiller Indexes include data covering thousands of ZIP codes, counties, metro areas and state markets.