The positive momentum for housing price appreciation that has been occurring at a rapid pace over the last 12 to 18 months is beginning to slow down in August.
Even though DataQuick’s latest Property Intelligence Report revealed home price growth happened in all 42 counties the firm analyzes over the last year and 40 out of 42 saw an increase on a monthly basis, economic uncertainty has contributed to a dampening in the rate of value appreciation.
“While home price growth has been rapid over the last 12 months, this home price growth does not provide a return to the home price levels experienced at the peak,” said Gordon Crawford, vice president of analytics at DataQuick.
Rising interest rates, uncertainty about employment, and uncertainty about the direction of monetary and fiscal policy are potential factors that contributed to home price growth decreasing slightly from the elevated levels that we have been experiencing.
The PIR determined that none of the counties saw home prices increase by more than 2% in August compared to July. Oakland, Calif., had the largest month-over-month property value appreciation at 1.97%, followed by the California cities of Sacramento and Richmond at 1.94% and 1.75%, respectively.
Out of the 40 metropolitan markets that had home values rise in August compared to July, only 19 saw an uptick in prices by at least 1%, the report concluded.
“In fact, although the experience differs across markets, most markets still have home prices that are well below peak home price levels,” Crawford added. “This is significant as it means that many households remain with negative equity, limiting the supply of available properties for sale.”
Additionally, the PIR shows that foreclosures rose in several counties that had been experiencing decreases over previous months. For example, San Bernadino County in California had the biggest jump as foreclosures were up about 58% in August. Over the last quarter, foreclosures in this region were down more than 12%.
Another notable market where this foreclosure trend occurred is San Diego, which was down more than 35% but increased during August by at least 15%. Phoenix’s foreclosures fell 12% over the last quarter, but rose in August by 18%, while St. Louis saw a 21% drop in foreclosures over the last quarter and were now up 18% in August.
DataQuick also highlighted in the report that sales growth increased in 29 of the 42 counties on a monthly basis, led by Queens, N.Y., which reported about a 45% uptick. Home sales were higher in August 2013 than a year ago in 30 of the 42 counties.
Though overall housing numbers still remain positive for the year, Crawford predicts that monthly growth rates will “continue to taper” from the levels seen in early 2013, therefore demonstrating how far it still is from “complete recovery to pre-crash levels.”