Gains in Asking Prices Threatened by Foreclosures, Rent Up Again: Trulia
By: Esther Cho
After falling flat in May, asking prices went up in June, and rent prices continued to see significant increases, according to reports from Trulia released Tuesday.
Asking prices on listed homes made a 0.3 percent month-over-month and year-over-year increase in June, according to Trulia’s price monitor. Quarter-over-quarter, asking prices rose by 0.8 percent. When excluding foreclosures, asking prices moved upwards by 0.8 percent from May to June and by 1.7 percent from June 2011. Asking prices are said to lead sales prices by about two to three months.
“We saw asking prices start to rise in February and predicted that other home price indexes would report sales price increases this summer for those homes – and they have,” said Jed Kolko, Trulia’s Chief Economist. “Since February, asking prices showed solid gains in four out of five months, including in June, so I expect to see the sales-price indexes show further increases in the months to come.”
On a seasonally adjusted basis, 44 out of the 100 largest metros saw yearly gains in asking prices, and 84 out of the 100 largest metros had quarterly increases for asking prices.
The metro with the biggest yearly gain in asking prices was Phoenix, where prices rose by 18.9 percent. Florida metros took the next three spots, with Miami coming in at second (+16.1 percent), Cape Coral (14.9 percent) third, and West Palm Beach (9.6 percent) fourth. Denver was fifth and had a 7.2 percent increase.
Despite these gains, Trulia warned that some of these top performing metros will start moving in the opposite direction.
“The huge price gains we’ve seen in Miami and Phoenix are not built to last. These increases will shrink or reverse as the backlogged foreclosures in these metros hit the market,” said Jed Kolko, Trulia’s Chief Economist. “In contrast, Denver, San Jose and Austin, which were spared the worst of the housing crisis, have strong price growth and strong job growth without a foreclosure overhang. Their recent price gains are less dramatic than Miami and Phoenix but are less at risk. Slow and steady wins the housing recovery.”
Prices for rent made a 5.4 percent jump in June compared to the year before, according to Trulia’s rent monitor. Out of 25 markets, 24 saw yearly increases in rental prices, with Las Vegas as the exception.
San Francisco posted a 14.7 percent yearly increase, making it number one for having the largest rent increase. Oakland came in at second with an 11.2 percent increase, followed by Denver (10.9 percent), Miami (10.5 percent), and Boston (10.3 percent).
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