Annual Home Appreciation Slows in Metro Areas
Revised from an article from RisMedia
RealtyTrac® recently released a February 2015 Home Price Appreciation Analysis which found that annual home price appreciation in February slowed compared to annual home price appreciation a year ago in 60 of the 92 metros analyzed with a population of 500,000 or more and sufficient home price data.
The report also found that the U.S. median home price in February increased 14 percent from a year ago but was flat from the previous month to $183,000. The median sales price of distressed homes—those in the foreclosure process or bank-owned—increased 13 percent from a year ago to $127,000, 33 percent below the median sales price of non-distressed properties, $190,000.
“While still significant at 33 percent, the average discount buyers are realizing on distressed homes has been shrinking over the past 18 months after hitting a high of 40 percent in September 2013,” says Daren Blomquist, vice president at RealtyTrac.
“Inventory of distressed properties is drying up in many markets even while demand for those properties—which typically fall into the target market for both investors and first-time homebuyers—is ramping up. That is in turn resulting in nationwide home prices skewing higher as a smaller share of homes sell at the lower end of the market.”
“2014 was a historical year for the luxury market in the Lake Tahoe area,” says Sue Lowe, a Senior Vice President/Corporate Broker covering the Lake Tahoe and Reno, Nev. Markets. “We expect to see big things happen as the summer buying season begins in 2015.”
Home price appreciation slows in 65 percent of metros.
Among the nation’s largest metro areas, those with slowing home price appreciation included New York, New York (annual appreciation of 3 percent compared to 6 percent last year), Los Angeles, California (annual appreciation of 9 percent compared to 20 percent last year), Chicago, Illinois (annual appreciation of 6 percent compared to 16 percent last year), Washington DC (annual appreciation of 6 percent compared to 7 percent last year), and Miami, Florida (annual appreciation of 10 percent compared to 20 percent last year).
“Last year, Seattle home prices saw double digit increases, but as we predicted earlier this year, that pace has started to slow,” says OB Jacobi, president of a real estate company covering the Seattle market where annual price appreciation was 6 percent compared to 13 percent a year ago. “We actually see this as a good thing because if home prices were to continue appreciating in the double digits for too long, we could run into the same boom/bust market of years past.”
17 metro areas reached new peaks in median home prices in 2014
The recovery has helped 17 metro areas (18 percent of total 92) reach new peaks in median home prices in 2014 including Denver, Colorado ($265,000), San Jose, California ($714,750), Chattanooga, Tennessee ($130,000), Madison, Wisconsin ($215,900) and Nashville, Tennessee ($175,000).
Markets that have made the most gains since hitting their housing bottoms
Home price appreciation in February helped many markets that had hit their housing price bottom increase to new heights including Detroit, Michigan (up 154 percent), Grand Rapids, Michigan (up 118 percent), San Francisco, California (up 115 percent), Cape Coral, Florida (up 102 percent), San Jose, California (up 90 percent), Modesto, California (up 72 percent) and Los Angeles, California (up 70 percent).