Overall price metrics lag the movement at the lower end of the market from six months to as long as a year, according to the company’s deputy chief economist Sam Khater in its MarketPulse newsletter.
Of 21 different markets analyzed by CoreLogic, six had price growth deceleration at the low end of the market, while four had it at the high end. But the real difference is the size of the deceleration, Khater argues.
In Phoenix, for example, low-end price growth in September on a year-over-year basis was 15.5%, compared with 23.2% in March, a difference of 770 basis points. For the high end, price growth was 14.6%, down from 16.2% in March. The 160 bps difference was the largest spread at the high end during the period, Khater says.
Between 2000 and the peak of the boom in 2006, lower-end prices increased 20 percentage points more than higher end prices. During the bust in 2012, that gap shrunk to 12 percentage points.
Currently, low-end prices are 22 percentage points over higher-end prices, the biggest gap in the past two decades. This is the sign that the correction in prices at the low end of the market is over and in 2014, overall price growth will be markedly slower, Khater says.