Home Prices Moderate as Markets Stabilize
The past six years have seen many highs and lows in the real estate market. Fortunately, the national housing market is beginning to look stable. Trulia has released their latest Price Monitor and has high hopes for the stability of the national market. According to the Price Monitor, none of the 100 largest markets saw home prices rise more than 20 percent year over year. This is the first occurrence since July 2012.
Jed Kolko, chief economist at Trulia, notes that this is the first sign of sustainability in the housing market in years. It is a welcome change from the unpredictability of home prices in markets across the United States, with asking prices in the West rising as much as 30 percent from 2012 to 2013. This hyper activity has several economists worried that yet another boom/bust cycle was being created. Kolko stated “That’s a good thing. Extreme price increases create unrealistic expectations, encourage flipping, and night discourage some owners from selling if they expect big increases to continue.”
May asking prices rose 8 percent over April. While this is the slowest rise in the past 13 months, it remains above the long term historical norm for price appreciation. In addition, prices rose 2.4 percent quarter over quarter in May. The number of markets with year over year price declines is also at a post recession low. Trulia noted the only markets seeing price declines as El Paso, Hartford, Albany, and Little Rock.
Yet another sign of a recovering economy is that fact that rents have increased throughout the nation. A 5.1 percent increase is a healthy amount, according to Trulia. Rents for apartments have risen 5.8 percent while single-family rents are up 2.1 percent. Metro areas in California lead the nation in the rise of rents. The largest increase in rents was seen in San Francisco, San Diego, and Oakland.