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articles about “Price & Rent Monitors

Despite Home Price Slowdown, Wages Can’t Keep Up With Prices

Asking home prices rose faster than wages in 95 of 100 metros. Still, home prices were flat or falling quarter-over-quarter in the formerly booming markets of Las Vegas, Phoenix, Sacramento, and Orange County.

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.

Prices Rise 8.1% Year-over-Year in June
Both the quarter-over-quarter and year-over-year increases are lower than they were twelve months ago. In June 2014, prices were up 8.1% year-over-year and 2.6% quarter-over-quarter, compared with 9.5% and 3.1%, respectively, in June 2013.

But despite this national slowdown in price gains, price increases continue to be widespread, with 97 of 100 metros posting year-over-year price gains – the most since the recovery began. Furthermore, asking prices in June rose at their highest month-over-month rate (1.2%) in sixteen months.

Trulia_PriceMonitor_LineChart_June2014

June 2014 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
1.2% N/A 1.2%
Quarter-over-quarter,
seasonally adjusted
2.6% 94 2.5%
Year-over-year 8.1% 97 7.4%
*Data from previous months are revised each month, so data being reported now for previous months might differ from previously reported data.

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Home Price Gains Finally More Balanced, Sustainable, and Widespread

For the first time since July 2012, no local market saw home prices rise more than 20% year-over-year. Yet the number of markets with year-over-year price declines is also at a post-recession low.

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.

National Year-Over-Year Price Gain Slips to 8.0%
Asking home prices rose at their slowest rate in 13 months, rising just 8.0% year-over-year (7.2% excluding foreclosures). Although this year-over-year increase is slower than in previous months, an 8.0% increase is still far above the long-term historical norm for home-price appreciation. Furthermore, prices continue to climb in the most recent quarter: the 2.4% quarter-over-quarter increase in May 2014 is equivalent to 9.9% on an annualized basis. Finally, price gains continue to be widespread, with 93 of the 100 largest metros clocking quarter-over-quarter price increases, seasonally adjusted.

May 2014 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

0.7%

Not reported

0.5%

Quarter-over-quarter,
seasonally adjusted

2.4%

93

2.2%

Year-over-year

8.0%

96

7.2%

*Data from previous months are revised each month, so data being reported now for previous months might differ from previously reported data.

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The Housing Recovery Needs More Than Just Rising Prices

In the boom-and-bust housing markets with the biggest price rebounds, construction activity is lagging. In contrast, the markets where construction has recovered include big-city metros with strong rental demand. Rents are up 4.5% year-over-year, and rental affordability is worst in Miami and New York.

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.

Yearly Price Gain Smallest in 11 Months, Despite Steady Monthly Rise
Nationally, asking prices rose 0.8% month-over-month and 2.8% quarter-over-quarter in April, seasonally adjusted. Those gains are in line with March increases and show that home prices continue to rapidly climb.

However, asking prices rose 9.0% year-over-year, which is the smallest year-over-year increase in 11 months. Why are year-over-year price increases slipping despite month-over-month and quarter-over-quarter increases holding steady? One reason is that the biggest price spike during the housing recovery happened between February and April 2013, and the year-over-year change in April 2014 no longer includes those months.

TruliaPriceMonitor_LineChart_Apr2014

April 2014 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

0.8%

Not reported

0.8%

Quarter-over-quarter,
seasonally adjusted

2.8%

97

2.8%

Year-over-year

9.0%

97

8.4%

*Data from previous months are revised each month, so data being reported now for previous months might differ from previously reported data.

Construction Still Lags in Housing Markets with Biggest Price Rebounds
The housing markets with the largest year-over-year asking-price increases in April 2014 were Riverside-San Bernardino, Las Vegas, Oakland, Sacramento, and Detroit, all of which are rebounding from steep price declines during the housing bust. However, big price rebounds are no guarantee that a local housing market has recovered. In fact, construction permit data for 2013 – released last week by the Census – shows that markets with the sharpest price rebounds are still lagging in construction activity. Among the 10 markets with the highest year-over-year asking-price increases, only Los Angeles had construction activity in 2013 that was above the 1990-2012 local average. In Riverside-San Bernardino, Las Vegas, Sacramento, and Detroit, construction activity in 2013 was less than half of normal for those markets. 

Where Asking Prices Rose Most Year-over-Year, April 2014

# U.S. Metro

Y-o-Y % asking price change, Apr 2014

2013 building permits relative to 1990-2012 local average

2013 building permits, per 1,000 housing units (2010 Census)

1 Riverside-San Bernardino, CA

21.0%

45%

6.2

2 Las Vegas, NV

20.0%

37%

10.2

3 Oakland, CA

19.3%

66%

5.1

4 Sacramento, CA

19.0%

36%

4.8

5 Detroit, MI

16.9%

32%

1.2

6 Bakersfield, CA

16.6%

61%

8.2

7 Atlanta, GA

16.1%

55%

11.2

8 Orlando, FL

15.2%

79%

16.5

9 Warren-Troy-Farmington Hills, MI

15.0%

49%

5.0

10 Los Angeles, CA

14.9%

103%

4.3

Among 100 largest metros. Construction permit and housing unit data from Census. Nationally, 2013 permits were 73% of the 1990-2012 average, and there were 8.5 building permits per 1,000 housing units.To download the list of asking home price changes for the largest metros: Excel or PDF.

If construction is lagging where prices are rebounding, where is construction running ahead of local normal levels? The San Francisco Bay Area is currently having a relative construction boom. In San Francisco, 2013 building permits were 185% of the 1990-2012 local average (that is, 85% higher than normal); San Jose permits were 147% of their own normal. Two other big, expensive metros – New York and Boston – along with their respective neighbors of Fairfield County, CT, and Middlesex County, MA – are also building more than normal. Most of the construction in these big-city metros is multi-unit buildings and will be rented as apartments rather than sold as condos. These markets are getting a boost in rental demand as more young adults find jobs, move out of their parents’ homes, and form their own households.

Of course, construction in San Francisco, New York, and Boston is high only relative to what’s normal in those metros, and “normal” in those metros is pretty low.  Relative to market size, measured by total housing units, San Francisco is building roughly one-fourth as much as Austin (7.8 permits per 1000 units in San Francisco, versus 29.5 in Austin), and less than Las Vegas and Atlanta are.

Where Construction is Highest Relative to The Local Norm, 2013

# U.S. Metro

Y-o-Y % asking price change, Apr 2014

2013 building permits relative to 1990-2012 local average

2013 building permits, per 1,000 housing units (2010 Census)

1 San Francisco, CA

12.5%

185%

7.8

2 San Jose, CA

11.8%

147%

11.9

3 Austin, TX

10.1%

145%

29.5

4 Middlesex County, MA

7.4%

143%

7.3

5 Oklahoma City, OK

2.4%

139%

13.9

6 Houston, TX

9.8%

138%

22.2

7 Boston, MA

7.0%

131%

6.7

8 New York, NY-NJ

4.5%

130%

5.6

9 Orange County, CA

12.4%

127%

9.9

10 Fairfield County, CT

4.1%

126%

6.9

Among 100 largest metros. Construction permit and housing unit data from Census. Nationally, 2013 permits were 73% of the 1990-2012 average, and there were 8.5 building permits per 1,000 housing units. To download the list of asking home price changes for the largest metros: Excel or PDF.

Here’s the point: just because local home prices have rebounded doesn’t mean that a market has fully recovered. Nearly all of the markets where asking prices rose most year-over-year still have much less construction than what’s normal for those markets. Instead, builders are building in markets that avoided the worst of the bust and are therefore not having big price rebounds today.

Where 2-Bedroom Rental Costs More than 60% of Typical Paycheck
Nationally, rents have increased 4.5% year-over-year and are up more than 10% in San Francisco, Oakland, and Denver. Even though renting a home, like buying, is expensive in California, the two least affordable markets for renting are Miami and New York. In those markets, the median rent for a 2-bedroom unit costs more than 60% of the local average wage – that’s twice as much as the rule of thumb that housing shouldn’t cost more than 30% of your income. Granted, many households in expensive markets make ends meet by having more than one wage earner, living in less than a 2-bedroom, or having non-wage income. Still, renting costs only half as much, relative to local wages, in Seattle, Dallas, Houston, Atlanta, and several other metros as in Miami and New York.

Rent Trends and Affordability in the 25 Largest Rental Markets

# U.S. Metro

Y-o-Y % change in rents, Apr 2014

Median rent, 2-bedroom unit, Apr 2014

Median rent for 2-bedroom, as share of average local wage

1 Miami, FL

6.6%

$2,350

62%

2 New York, NY-NJ

5.4%

$3,450

62%

3 Los Angeles, CA

5.1%

$2,350

54%

4 San Francisco, CA

17.0%

$3,450

51%

5 Oakland, CA

10.1%

$2,350

46%

6 Riverside-San Bernardino, CA

4.7%

$1,500

46%

7 Orange County, CA

3.3%

$2,000

45%

8 Boston, MA

2.5%

$2,300

43%

9 San Diego, CA

9.7%

$1,900

43%

10 Washington, DC-VA-MD-WV

0.4%

$2,100

37%

11 Chicago, IL

4.7%

$1,600

37%

12 Baltimore, MD

6.2%

$1,550

36%

13 Philadelphia, PA

2.9%

$1,500

33%

14 Denver, CO

10.6%

$1,450

32%

15 Tampa-St. Petersburg, FL

3.5%

$1,100

31%

16 Seattle, WA

9.2%

$1,750

31%

17 Dallas, TX

3.8%

$1,400

30%

18 Minneapolis-St. Paul, MN-WI

3.5%

$1,300

29%

19 Portland, OR-WA

6.7%

$1,200

29%

20 Houston, TX

3.3%

$1,400

29%

21 Atlanta, GA

7.8%

$1,150

27%

22 Phoenix, AZ

7.5%

$1,050

27%

23 Sacramento, CA

6.8%

$1,150

27%

24 Las Vegas, NV

2.5%

$950

27%

25 St. Louis, MO-IL

6.1%

$950

25%

To download the list of rent changes for the largest metros: Excel or PDF. Wage data are from the Bureau of Labor Statistics for 2013 Q3, which only reports average wages, not medians.

 The next Trulia Price Monitor and Trulia Rent Monitor will be released on Thursday, June 5th.

How did we put this report together? To recap the methodology, the Trulia Price Monitor and the Trulia Rent Monitor track asking home prices and rents on a monthly basis, adjusting for the changing composition of listed homes, including foreclosures provided by RealtyTrac. The Trulia Price Monitor also accounts for the regular seasonal fluctuations in asking prices in order to reveal the underlying trend in prices. The Monitors can detect price movements at least three months before the major sales-price indexes do. Historical data are sometimes revised each month, and historical data in the current release are the best comparison with current data. Our FAQs provide all the technical details.

 

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Home Prices and Population Growth: Cities vs. Suburbs

From some angles, it looks like the housing recovery has brought an urban resurgence: for instance, the most urban counties are growing faster now than during the housing bubble, and many dense cities are having a boom in apartment construction. However, the most recent data show that asking prices in urban neighborhoods are rising only slightly faster than in the suburbs, and the suburbs actually have higher population growth.

 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 (see note #1 below).

Asking Prices Continue to Rise as Spring House Hunting Season Begins
Despite declining investor purchases and more inventory coming onto the market, asking home prices continued to rise at the start of the spring housing season. Month-over-month, asking prices rose 1.2% nationally in March 2014, seasonally adjusted. Quarter-over-quarter, asking prices rose 2.9% in March 2014, seasonally adjusted, reflecting three straight months of solid month-over-month gains.

Year-over-year, asking prices are up 10% nationally and up in 97 of the 100 largest metros. Albany, NY, Hartford, CT, and New Haven, CT, are the only three large metros where prices fell year-over-year, albeit slightly.

TruliaPriceMonitor_LineChart_Mar2014

March 2014 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

1.2%

Not reported

1.1%

Quarter-over-quarter,
seasonally adjusted

2.9%

97

2.8%

Year-over-year

10.0%

97

9.5%

*Data from previous months are revised each month, so data being reported now for previous months might differ from previously reported data.

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What The Home-Price Slowdown Really Looks Like

The current slowdown of home prices has been sharpest in markets that crashed during the bust and bounced back last year. And although asking-price gains have been slowing since last spring, price increases remain high by historical standards.

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-Price Gains Have Been Slowing Down Since April 2013
Nationally, asking home prices rose 10.4% year-over-year in February 2014, down slightly after peaking in November 2013. But the year-over-year change is an average of the past twelve months and therefore obscures the most recent trends in prices. Looking at quarter-over-quarter changes instead, it’s clear that price gains have been slowing for most of the last year: asking home prices rose just 1.9% in February – a rate similar to those recorded in January and December – compared with increases near 2.5% from July 2013 to November 2013 and over 3% from April 2013 to June 2013. The quarter-over-quarter change in asking prices topped out at 3.5% in April 2013 and now, at 1.9%, the increase is just over half of that peak.

But even with this slowdown in gains, prices are still rising much faster than the historical norm. The quarter-over-quarter increase in February of 1.9% implies an annualized rate of almost 8% – which is well above the long-term average.

TruliaPriceMonitor_LineChart_Feb2014

February 2014 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

0.9%

Not reported

0.9%

Quarter-over-quarter,
seasonally adjusted

1.9%

87

1.8%

Year-over-year

10.4%

97

9.8%

* Data from previous months are revised each month, so data being reported now for previous months might differ from previously reported data.

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