Watchhttp://www.centralvalleybusinesstimes.com/stories/001/?ID=22233
Biggest year-over-year increase since 2006 • October may see even higher increase Home prices nationwide, including distressed sales, increased on a year-over-year basis by 5 percent in September compared to September 2011, according to a new report Tuesday from financial information company CoreLogic Inc. (NYSE: CLGX) of Santa Ana.
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38 comments
A 5% YOY rise in prices is not a jump. Consider that 2011 was a post tax credit trough, and 2012 saw interest rates drop by a full percentage point. And with Harp 2.0 allowing refinancing of any LTV ratio, is a 5% rise at all surprising? Distressed inventory has all but disappeared.
And, by the way, the 5% is the median price. I think it's worth considering that just because the median rises 5%, that doesn't mean that the sales price of any particular home within that sample has increased. In fact, all the prices could have decreased and yet the median could rise.
How so? The median is the point where half the homes sell above that value and the other half below. If 10 houses sell in 2011 with the following values: 10k, 20k, 30k, 40k, 50k, 60k, 70k, 80k, 90k, 100k --> 2011 median = 55k
Due to loss of distressed sales, the 10k and 20k houses don't sell in 2012, and are replaced by houses identical to the 70k 2011 houses. Additionally, all homes sell for 10% less and we have the following sales: 27k, 36k, 45k, 54k, 63k, 63k, 63k, 72k, 81k, 90k --> median = 63k.
This shows a rise of 14% in the median price that would be reported by the NAR. And yet all homes in the area are selling for 10% less. There are liars, damn liars, statisticians, and then realtors who pump false statistics.
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Madison, WI
When the fed is pumping 40 billion dollars of funny money per month into RE I think your going to eventually see more of a run than that!
Do people forget so easily that the policy is to inflate?, with rates dropping and funny money being injected into the mix would you expect home prices to go down? Besides, the prices are based on easy money.
Did we forget that the housing crash was caused by fleeing investors in the first place???
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country_stroll says
You will be flamed by Iwog and his buddies. How dare you say that prices have not gone up!
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Scottsdale, AZ
robertoaribas's website
bubblesitter says
Technically, true. However, In my neck of the woods, homes I bought just 2 years ago are selling for fully 100% more and then some... No index shows that much change, 30% is about the most I see on an index, but in certain cases, really distressed properties were selling at over 80% off peak, and they have rebounded nicely.
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country_stroll says
I agree, but when median prices were falling.. Bears were pointing to it gleefully as evidence of falling home prices. When a large proportion of foreclosures and GIVE AWAY homes were putting downward pressure on median prices to an extreme.
you can't have it both ways!
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bubblesitter says
You can't have it both ways.. Bears were gleefully pointing to falling median home prices last year. Give the bulls their fair dues... I'm sure it will reverse soon.. especially if the fiscal cliff isn't addressed properly. Then you can come back and point to dropping median home prices as evidence too!
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Campbell, CA
robertoaribas says
Speculative bubble? nah, that's sustainable growth right there!
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Seriously guys,get a life with your investment properties cuz prices are not going up! Prices have gone up only for handful of people(investors at low end) who snagged troubled properties and are now touting 5% gains. For the most part regular home owners are struggling to get rid off(or move up) that mid to high end properties,where banks are thinking 1000 times before issuing a loan.
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I expect prices to drop again, with rising taxes out there, and mild case of depression Republican party is going through... there will be consequences.
Now what I don't know is how lasting they will be, and what kind of tax deal will be worked out. If mortgage deductions go away, prices will drop significantly.
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92603 is right on top of this. There are many listings with asking prices that are double what they paid in 2006. Really?
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turtledove says
Asking means shit!
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bubblesitter says
Of course, but it provides an interesting insight into how the sellers are responding to all these glowing recovery reports.
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Scottsdale, AZ
robertoaribas's website
CrazyMan says
Nope, that is an overcorrection to the downside... 3/2 condos near colleges shouldn't be selling for 30K... when they rent for 800!
Even at $60K they are too cheap...
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turtledove says
Means further shit cuz no one is gonna pay for it. Simply some one can't move up to snag that over priced wooden box.
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San Jose, CA
I am expecting low inventory and disappearing interest in purchase between buyers. More expensive houses will have downward pressure on price reduction.