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Kenan Jue's Blog

By Kenan Jue | Real Estate Pro in San Francisco, CA

Asking Prices Slowing in Two Thirds of the Largest Metros

The Trulia Price Monitor and the Trulia Rent Monitor are the earliest leading indicators of how asking prices and rents are trending nationally and locally. They adjust for the changing mix of listed homes and therefore show what’s really happening to asking prices and rents. Because asking prices lead sales prices by approximately two or more months, the Monitors reveal trends before other price indexes do. With that, here’s the scoop on where prices and rents are headed.

Asking Prices Jump Nationally in September, but Price Slowdown Continues
Asking home prices increased 2.0% month-over-month in September. However, the quarter-over-quarter increase – which is less jumpy – was 3.0% in September, the smallest gain since February. Although monthly price changes remain volatile, the overall trend shows that price gains are slowing down, despite the fact asking prices were up 11.5% year-over-year – the largest increase since the housing crash.

How can there be a slowdown if year-over-year prices are hitting new highs? Because the year-over-year changes are averages over the previous 12 months, and the recent price slowdown hasn’t been underway for long enough to start bringing down the year-over-year changes.

September 2013 Trulia Price Monitor Summary

% change in asking prices

# of 100 largest metros with asking-price increases

% change in asking prices,excluding foreclosures

Month-over-month,
seasonally adjusted

2.0%

Not reported

2.0%

Quarter-over-quarter,
seasonally adjusted

3.0%

89

3.1%

Year-over-year

11.5%

97

11.5%

*Month-over-month change is September versus August. Quarter-over-quarter and year-over-year changes are three-month averages. Data from previous months are revised each month, so data being reported now for previous months might differ from previously reported data.

Trulia Price Monitor_Line Chart_Sept 2013

Asking Prices Declining in Several Florida Metros, Slowing Down in California
In September, 89 of the 100 largest metros had quarter-over-quarter price increases. That’s down from 93 in August, 96 in July, and 97 in June. The 11 metros where prices fell quarter-over-quarter include three in Florida and two in upstate New York. In most of these markets, prices had been rising before the most recent quarter, so their year-over-year change is still positive. Also, keep in mind that the trend in asking prices over the past quarter – that is, July to September – should affect sales prices from September to November, which won’t be fully reflected in the major sales-price indexes until their January 2014 releases. So you heard it here first.

The 11 Metros Where Asking Prices Fell Quarter-over-Quarter

#U.S. Metro

Q-o-Q % change, September 2013

Y-o-Y % change, September 2013

1West Palm Beach, FL

-4.6%

5.2%

2Albany, NY

-2.2%

-0.7%

3Miami, FL

-1.5%

9.8%

4Honolulu, HI

-1.5%

1.7%

5Syracuse, NY

-0.9%

4.6%

6Little Rock, AR

-0.5%

-0.7%

7Lakeland-Winter Haven, FL

-0.5%

12.7%

8El Paso, TX

-0.3%

0.6%

9Allentown, PA-NJ

-0.1%

1.8%

10Albuquerque, NM

-0.1%

3.4%

11Akron, OH

-0.02%

2.3%

In addition to the 11 metros where asking prices are actually declining, price slowdowns have become widespread. (Driving is a good analogy for explaining the difference between price declines and price slowdowns: price declines are like putting a car into reverse, while price slowdowns are like tapping the brakes but still moving forward.) Remember: the way we spot a price slowdown is by looking at the quarter-over-quarter change – it’s less volatile then a monthly change but less smoothed out than a yearly change.

Among the 100 largest metros, 68 had slower quarter-over-quarter price changes than three months earlier, in June. Sacramento, Oakland, Orange County, and Los Angeles all had price slowdowns of 2% or more, even though prices in those metros are still up more than 20% year-over-year. Atlanta is the only metro where prices are up at least 20% year-over-year and the quarter-over-quarter price change is accelerating by more than 1%.

Recent Price Changes in the 20 Hottest Markets

#U.S. Metro

Y-o-Y % change, September 2013

Q-o-Q % change, September 2013

Q-o-Q % change, June 2013

Price slowdown = Difference in Q-o-Q % change, September minus June

1Las Vegas, NV

34.4%

7.1%

7.6%

-0.5%

2Sacramento, CA

33.6%

4.4%

8.6%

-4.2%

3Oakland, CA

29.2%

3.2%

11.1%

-8.0%

4Riverside-San Bernardino, CA

26.9%

6.5%

6.9%

-0.4%

5Orange County, CA

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