A limited supply of properties available to purchase on the open market continues to affect prices in many of the nation’s largest counties, according to a report from DataQuick.
The San Diego-based company’s Property Intelligence Report revealed that home sales decreased in 30 of 42 counties analyzed on a monthly basis, while property values appreciated in all 42 counties during this same time period.
Over the last year, sales growth has been near zero or falling in half of the PIR’s reported markets, DataQuick said.
For example, in markets in the first sales growth quartile, home purchases were higher in 30.5% over the last year while property values rose 12.3%. Meanwhile, for the second sales growth quartile, acquisitions were up 14.5 and home prices increased by 12.3%. However, in the third sales growth quartile, sales were only higher by 1.1% while values rose by 18.3%. In the last quartile, sales fell 14.2%, but housing unit prices increased by 23.1%.
Some of the most notable metropolitan cities in which the sales growth rate has fallen month-over-month substantially include Boston (down 31.9%), Oakland, Calif., (25.6%), Washington, D.C. (24.3%), Chicago (21.6%), Orlando (down 18.4%), Denver (down 18.2%), Los Angeles (17.6%) and Jacksonville (15.2%).
But reduced sales are not the only reason for rapid home price appreciation, DataQuick notes, as markets that experienced more sales during the last year have also seen their values rise and exceed the long-term average.
Property values have grown over the last year from a minimum of nearly 4% in Fulton County, Ga., home to the Atlanta market, to a maximum of 32.7% in Sacramento. The average home price appreciation since November 2012 was 16.5%, DataQuick reported.
“Home prices have been correcting from an excessive downturn below fundamental values that occurred during the great recession and that has continued as housing market participants search for a floor in home prices,” says Gordon Crawford, vice president of analytics for DataQuick. “An even more likely explanation is that some of the excessive, above-trend, home price growth is speculative and characteristic of the formation of a new home price bubble.”
One driver that DataQuick does not expect to strongly impact housing prices or sales growth is the improving unemployment numbers. With more people working, the PIR confirmed that foreclosures decreased in 19 out of 42 counties in November, which is three fewer than the prior month.
“This month’s jobs reports was better than recent history, but is still far below where it needs to be to truly benefit the housing landscape,” says Crawford. “With U.S. population growth at roughly 0.9% or 2.8 million people per year, employment needs to grow by more than 235,000 a month to keep up with population growth. Last month, jobs only increased by 203,000.”