U.S. Home Prices Increased in 2012 at the Strongest Rate in Nearly Seven Years
CoreLogic® Case-Shiller Home Price Indexes Affirm 2012 a Big Year for Home Price Increases, More to Come in 2013-2017
Palm Coast, FL – May 16, 2013 – CoreLogic® Case-Shiller Home Price Indexes Affirm that 2012 was a Big Year for Home Price Increases. Increases are expected to continue through 2017 according to the company’s May Report. CoreLogic purchased Case-Shiller, probably the most-cited measure of changes in U.S. home prices, from Fiserv in April.
One-year trend:
Home prices are expected to rise by 2.5 percent in 2013. This is a decrease from 2012. The slower growth reflects shifts in supply and demand in former bubble areas. Although hard-hit metros are still undervalued, rising prices reduce investor demand and housing affordability. In addition, as negative equity declines, more sellers are able to list their homes. Better pricing also makes builders more likely to add to the supply of new homes.
Five-year trend:
The CoreLogic Case-Shiller Indexes project a continued trend of rising home prices over the next five years. Home prices are expected to rise at an annualized rate of 3.9 percent. “We expect strong buying activity this spring will lead to stabilization of home prices in most lagging markets, resulting in rising home prices in nearly every metro area by the end of 2013,” says Dr. David Stiff, chief economist for CoreLogic Case-Shiller.
Five metro areas recording the largest year-over-year gains in 2012:
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Phoenix +23.8%
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San Jose +17.0%
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Detroit +16.7%
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Miami +13.5%
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Las Vegas +13.4%
Five metro areas recording the largest year-over-year declines in 2012:
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Long Island -4.3%
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Virginia Beach -2.0%
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Richmond -1.5%
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Philadelphia -1.3%
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Birmingham -1.3%
Five metro areas recording the largest three-year home price gains through 2012:
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Detroit +30%
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San Jose +14.4%
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Houston +12.4%
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Phoenix +12.0%
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Warren, Mich. +9.9%
Five metro areas recording the largest three-year declines through 2012:
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Chicago -11.7%
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Atlanta -11.6%
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Camden N.J. -10.9%
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Jacksonville -10.2%
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Tucson -9.8%
“Consider Phoenix, where home prices rose 27.0 percent since the market hit bottom in 2011, making it the strongest residential real estate market in the U.S. Yet, home prives there are still 45 percent below their 2006 peak,” says Dr. Stiff. “Phoenix and other strongly rebounding markets will likely be buffeted by some volatility in home prices going forward. As all-cash purchases and investor demand wane, it is not clear if demand from first-time and trade-up buyers will immediately fill the void, as mortgage lending standards are still very strict and many consumers remain risk-averse. If non-investor demand ramps up too slowly, then recent double-digit price appreciation could decelerate suddenly or even turn negative for a few months.”
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