Home prices are finally starting to cool off at the end of 2013 after a strong surge occurred for the majority of the year, according to a report from Clear Capital.
Since the market trough in the fall of 2011, property values throughout the country are up 17%. But today, home values are back to where they were in 2003, indicating that overall the housing market is at pre-run-up norms.
“Though some market observers may take this as a sign of a deflating bubble, we see this as a natural, and welcomed evolution on the horizon of the new housing landscape,” said Alex Villacorta, vice president of research and analytics at Clear Capital. “Understandably, many current homeowners would like to see hot gains continue for some time to come. Market participants, however, are better served by a cooler and more sustainable recovery.”
National and regional rates of growth showed clear signs of moderation in November, as summer buying activity gave way to the typical winter slowdown. Home prices nationwide were up 10.8% year-over-year, which is slightly down from the 11% mark seen over the previous quarter’s yearly appreciation rate.
Meanwhile, more notable moderation took place on a quarterly basis. November national quarterly growth was 1.8%, a decrease of nearly a half when compared to the previous quarter’s 3.3% uptick.
The Midwest and Northeast were the only regions to see minimal gains in yearly price increases over the previous quarter, the Truckee, Calif.-based analytic provider says.
Additionally, while REOs and short sales accounted for 21.6% of all distressed sale activity, it is substantially lower than peak rates of 41% experienced two years ago.
“Moderating gains will create a stable market, instilling confidence in a broader base of buyers,” Villacorta says. “And as we know all too well, meteoric rises and subsequent falls in prices create increasing risk of all types.”