Home prices continue to rise
According to the CoreLogic Home Price Index (HPI) released today, home prices nationally, including distressed sales, rose 6.3 percent in October 2012 compared to October 2011, marking not only the largest increase since June 2006, but the eighth consecutive monthly year-over-year increase. The company forecasts an even healthier rise of 7.1 percent for November to be released next month, although the company does forecast a decrease of 0.3 percent compared to October.
While the change in October from September was a minimal 0.2 percent decrease in home prices, CoreLogic notes that “decreases in month-over-month home prices are expected as the housing market enters the offseason.” The HPI reveals that all but five states experienced price increases in October 2012 compared to October 2011.
Including and excluding distressed sales
Revealing an even brighter spot for the hard hit sector of the economy, CoreLogic reports that when home prices are analyzed with distressed sales taken out of the equation, home prices still rose 5.8 percent in October 2012 compared to October 2011.
Excluding distressed sales, November 2012 house prices are poised to rise 7.4 percent year-over-year from November 2011 and by 0.5 percent month-over-month from October 2012.
“The housing recovery that started earlier in 2012 continues to gain momentum,” said Mark Fleming, Chief Economist for CoreLogic. “The recovery is geographically broad-based with almost all markets experiencing some appreciation. Sand and energy states continue to experience the most robust appreciation and some judicial foreclosure states are even recording increasing prices.”
Regional performance varied
Including distressed sales, the five states with the highest home price appreciation were Arizona (+21.3 percent), Hawaii (+13.2 percent), Idaho (+12.4 percent), Nevada (+12.4 percent), and North Dakota (+10.4 percent).
Excluding distressed sales, the five states with the highest home price appreciation were Arizona (+16.6 percent), Hawaii (+12.2 percent), Nevada (+10.8 percent), Idaho (+9.7 percent), and California (+9.7 percent).
Including distressed sales, the five states with the greatest home price depreciation were Illinois (-2.7 percent), Delaware (-2.7 percent), Rhode Island (-0.6 percent), New Jersey (-0.6 percent), and Alabama (-0.3 percent).
Excluding distressed sales, this month only three states posted home price depreciation Delaware (-2.1 percent), Alabama (-1.5 percent), and New Jersey (-0.2 percent).
Forecasting housing in 2013
“We are seeing an ongoing strengthening of the residential housing market,” said Anand Nallathambi, president and CEO of CoreLogic. “Reduced inventories and improving buyer demand are contributing to stability and growth in home prices which is essential to the long term health of the housing market and the broader economy.”
Meanwhile, Dr. Lawrence Yun, Chief Economist warns, however, that if we go over the fiscal cliff, or if lending conditions tighten, a housing recovery could be threatened, so while housing is seeing signs of improvement, it continues to be in a precarious position as it marches down the very long road to recovery.