Trulia: Asking Prices Up 9.5% in May

The asking prices on homes for sale have risen 9.5% on a year-over-year basis for May, with increases seen in 98 of the top 100 metro areas, according to the Trulia Price Monitor.

If foreclosure sales are taken out of the equation, prices are up 10.5%. The year-over-year numbers are not seasonally adjusted.

On a seasonally adjusted basis, prices are up 1.1% from April.

Jed Kolko, chief economist for Trulia, said, “Home prices are rising fastest in the local markets that were least affordable to begin with.

“As the gap between the most and least affordable markets widens, more people in expensive markets like California will look to relocate to cheaper markets like Texas when the time comes to buy.”

Furthermore, the least affordable markets are becoming even more expensive to purchase a home in. Of the 10 least affordable markets, eight (seven of which are in California) had double-digit asking price increases. Trulia uses percentage of monthly average wage needed to pay mortgage to determine affordability.

Honolulu is the least affordable market and it had a year-over-year price increase of nearly 13%. The market with the largest price increase was Oakland, up 31%.

The only top 10 least affordable markets without double digit gains in price were the neighboring markets of New York City and Long Island, up 4.6% and 1.1%, respectively, year-over-year.