Coverage: Home prices rise more than forecast
A limited number of properties for sale against a backdrop of steady demand helped keep home prices elevated in January, according to S&P CoreLogic Case-Shiller data released Tuesday.
Katia Dmitrieva of Bloomberg News had the story:
Home prices continue to post solid gains across the country, with the largest advances occurring in the West. While demand is being spurred by robust job growth, inventory remains lean and is allowing sellers to raise asking prices. The number of previously owned houses on the market during the month was the lowest for any January in National Association of Realtors’ records back to 1999.
Higher property prices and mortgage rates near a four-year high, however, are putting a dent in affordability. New-home sales have declined for three straight months, according to government data released Friday, while first-time buyers of previously owned houses made up a smaller share of total purchases in February.
“The home price surge continues,” David Blitzer, chairman of the S&P index committee, said in a statement. “Two factors supporting price increases are the low inventory of homes for sale and the low vacancy rate among owner-occupied housing.”
Nat Levy of GeekWire reported that the Seattle market led the gains for the 17th month in a row:
According to the latest Case-Shiller national home price report, Seattle home prices in January rose 12.9 percent over the same period a year prior. The report calls out Las Vegas and San Francisco as the second and third fastest-rising housing markets and the only other markets with double digit annual gains.
Data released by the Northwest Multiple Listing Service earlier this month shows the median price for a home in Seattle jumped to $777,000 in February, up $20,000 from a record set in January. Across Lake Washington on the Eastside, the median price is inching closer to $1 million, with prices now at $950,000.
Seattle’s annual price gains more than double the national average of 6.2 percent. High demand and low inventory are responsible for home price hikes across the country, Case-Shiller says.
In Seattle, the trends are exacerbated by a population boom fueled by rapid job growth in technology and other industries. The Seattle Times reported yesterday that Seattle was one of only five big metro areas to gain population last year. Other high cost cities like New York and San Francisco saw a lot more people move out than move in, but Seattle gained 21,000 more residents from around the U.S. than it lost.
Niv Elis of The Hill reported that the change was twice as fast as GDP growth:
That extends a growth streak from December 2012, when the housing market hit a bottom. It amounts to an inflation-adjusted 4.7 percent increase, double the clip of GDP growth, according to David Blitzer, managing director of the Index Committee at S&P Dow Jones Indices.“Two factors supporting price increases are the low inventory of homes for sale and the low vacancy rate among owner-occupied housing,” Blitzer said in a statement.
A measure for housing supply is sitting at almost half its average since 2000, he noted, while the vacancy rate had dropped from 2.7 percent in 2010 to 1.6 percent in January.
Blitzer said the price increase was not yet affecting overall affordability in the nation.