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Tuesday, February 5, 2013

Home Prices Show Largest Annual Increase in Nearly Seven Years

Home prices in December posted the largest annual increase in nearly seven years according to CoreLogic's Home Price Index (HPI) report.  December was also the 10th consecutive month in which home prices increased nationally.

The index that included distressed sales (sales of owned real estate and short sales) increased by 8.3 percent compared to December 2011, the largest increase since May 2006.  With distressed sales excluded the HPI increased 7.5 percent year over year.  Prices were up 0.4 percent including distressed sales and 0.9 percent excluding distressed sales compared to November.  

CoreLogic's Pending HPI including distressed sales predicts that prices in January will rise by 7.9 percent on a year-over-year basis from January 2012 and fall by 1 percent on a month-over-month basis from December 2012, reflecting a seasonal winter slowdown. Excluding distressed sales, prices are expected to rise 8.6 percent on an annual basis and 0.7 percent month over month. The CoreLogic Pending HPI is based on Multiple Listing Service (MLS) data that measure price changes for the most recent month.

"We are heading into 2013 with home prices on the rebound," said Anand Nallathambi, president and CEO of CoreLogic. "The upward trend in home prices in 2012 was broad based with 46 of 50 states registering gains for the year. All signals point to a continued improvement in the fundamentals underpinning the U.S. housing market recovery." 

The four states in which prices decreased in December were Delaware (-3.4 percent), Illinois (-2.7 percent), New Jersey (-0.9 percent) and Pennsylvania (-0.5 percent).  When distressed sales were excluded three states had price depreciation, Delaware (-1.9 percent), Alabama (-1.0 percent) and New Jersey (-0.5 percent). 

The five states with the greatest home price appreciation including distressed sales were Arizona (+20.2 percent), Nevada (+15.3 percent), Idaho (+14.6 percent), California (+12.6 percent) and Hawaii (+12.5 percent).  Excluding distressed sales the five highest were Arizona (+16.4 percent), Nevada (+14.7 percent), California (+12.8 percent), Hawaii (+11.7 percent) and North Dakota (+10.8 percent).
Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to December 2012) was -26.9 percent. Excluding distressed transactions, the peak-to-current change in the HPI for the same period was -20.8 percent.

Of the top 100 Core Based Statistical Areas (CBSAs) measured by population, only 16 are showing year-over-year declines in December, two fewer than in November.  

Contributed by Jann Swanson

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