The latest FNC Residential Price Index® (RPI) indicates that U.S. property values continued to recover through January—the 11th consecutive month of rising prices. Despite the uneven pace of price gains across different geographical markets, there are clear signs that the housing recovery is increasingly widespread. (Editor’s Note: these national statistics always trail the market by about 2 months, but they do point to trends that likely have continued.)
A limited housing supply and declining foreclosure sales are contributing to the recovery of underlying property values. The average list-to-sale price ratio increased to 93.5 in January, compared to 90.3 during the same period a year ago; in other words, the average asking price discount dropped to 6.5% from 9.7%. Foreclosures, as a percentage of total home sales, were 20.2% in January, down from 26.9% a year ago.
Based on recorded sales of non-distressed properties (existing and new homes) in the 100 largest metropolitan areas, the FNC 100-MSA composite index shows that January home prices rose 0.3% from the previous month and were up 5.7% on a year-over-year basis from the same period in 2012.1 The 30-MSA and 10-MSA composite indices show similar trends of rising prices, with the 10-MSA composite accelerating more rapidly at 0.8% month-over-month and 7.2% year-over-year.
FNC’s RPI is the mortgage industry’s first hedonic price index built on a comprehensive database that blends public records of residential sales prices with real-time appraisals of property and neighborhood attributes.2 As a gauge of underlying home values, the RPI excludes sales of foreclosed homes, which are frequently sold with large price discounts, reflecting poor property conditions.
What about our local market? I’ve certainly seen the rise in home sale prices and the impact of the lack of inventory locally. It’s really frustrating that I’ve got buyers who are ready, willing and able to buy a new home and we can’t find anything for them. As for would-be sellers who have been sitting on the sidelines awaiting a recovery – HELLO! The recovery has occurred and you should take a look at what you house is worth today.
Sure we haven’t made back the entire 30-40% that home values lost from their 2006-7 peaks values; but unless you bought or refinanced at that peak, you are probably OK in terms of what you can get for your house. At least find out. Ask me to do a Comparative Market Analysis for you. The analysis free and may free you up to get on with your life plans by making the move that you’ve been delaying.