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Weak March Sales Threaten To Rain on Price Parade

Weak March Sales Threaten To Rain on Price Parade

The year over year price increases that the real estate industry has grown accustomed to may be in for some dicey days if sales in April aren’t better than March.  March prices registered an 11.1 increase over 2013, 1.3 percent higher than February, but CoreLogic is forecasting a rise of only 0.8 percent in April.

The CoreLogic HPI Forecast indicates that the year over year home price cushion will fall to 6.7 percent (+/- 1.5 percent) from March 2014 to March 2015. Excluding distressed sales, home prices are expected to rise 0.6 percent month over month from March 2014 to April 2014 and by 5.7 percent (+/- 1.5 percent)** year over year from March 2014 to March 2015.

At the state level, including distressed sales, only Arkansas (-0.3 percent) posted depreciation in March 2014. Additionally, Colorado, the District of Columbia, North Dakota, South Dakota, Texas and Wyoming all surpassed their previous home price peaks in March 2014. In all, 23 states and the District of Columbia are at or within 10 percent of their peak home price appreciation.

Excluding distressed sales, home prices nationally increased 9.5 percent in March 2014 compared to March 2013 and 0.9 percent month over month compared to February 2014. Distressed sales include short sales and real estate owned (REO) transactions.

“March data on new and existing home sales was weaker than expected and is a cause for concern as we enter the spring buying season,” said Dr. Mark Fleming, chief economist for CoreLogic. “Interest rate-disenfranchised potential sellers are adding to the existing shadow inventory, while buyers who can’t find what they want to buy are on the sidelines creating a new kind of ‘shadow demand.’ This supply and demand imbalance continues to drive home prices higher, even though transaction volumes are lower than expected.”

“Home prices continue to rise across the nation, but affordability, tight credit and supply concerns are becoming an increasing drag on purchase market activity,” said Anand Nallathambi, president and CEO of CoreLogic. “In many markets – especially major metro areas like Los Angeles, Atlanta and New York – home prices are being driven up at double-digit rates fueled by a lack of inventory and record levels of cash purchases.”

Highlights as of March 2014:

•            Including distressed sales, the five states with the highest home price appreciation were California (+17.2 percent), Nevada (+15.5 percent), Georgia (+12.4 percent), Hawaii (+12.3 percent) and Oregon (+12.2 percent).

•            Excluding distressed sales, the five states with the highest home price appreciation were California (+13.2 percent), Nevada (+11.8 percent), Florida (+10.9 percent), Maine (+10.6 percent) and Hawaii (+10.6 percent).

•            Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to March 2014) was -16.0 percent. Excluding distressed transactions, the peak-to-current change in the HPI for the same period was -11.6 percent.

•            Including distressed sales, the five-year HPI change (from March 2009 to March 2014) was 20.1 percent.

•            Including distressed sales, the United States has experienced 13 consecutive months of year-over-year, double-digit growth.

•            The five states with the largest peak-to-current declines, including distressed transactions, were Nevada (-39.9 percent), Florida (-36.3 percent), Arizona (-30.3 percent), Rhode Island (-28.1 percent) and Illinois (-26.5 percent).

•            Ninety-eight of the top 100 Core Based Statistical Areas** (CBSAs) measured by population showed year-over-year increases in March 2014. The two CBSAs that did not show an increase were Little Rock-North Little Rock-Conway, Ark., and Rochester, N.Y.

*February data was revised. Revisions with public records data are standard, and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results.

** The forecast accuracy represents a 95-percent statistical confidence interval.

 

March HPI for the Country’s Largest CBSAs by Population (Ranked by Single Family, Including Distressed):

March 2014 12-Month HPI

Change by CBSA

Single Family Including Distressed           Single Family Excluding Distressed

Riverside-San Bernardino-Ontario, CA   20.9%   17.7%

Los Angeles-Long Beach-Glendale, CA    17.1%   13.4%

Atlanta-Sandy Springs-Roswell, GA         14.1%   10.5%

Houston-The Woodlands-Sugar Land, TX 13.7% 11.7%

Chicago-Naperville-Arlington Heights, IL              11.3%   11.5%

Phoenix-Mesa-Scottsdale, AZ                   11.0%   9.7%

Dallas-Plano-Irving, TX                               11.0%   9.5%

New York-Jersey City-White Plains, NY-NJ 10.2%              10.4%

Minneapolis-St. Paul-Bloomington, MN-WI 9.0%             9.9%

Washington-Arlington-Alexandria, DC-VA-MD-WV 7.4%              6.7%

 

March National and State HPI (Ranked by Single Family, Including Distressed):

March 2014 12-Month HPI

Change by State

                            Single Family Including Distressed           Single Family Excluding Distressed

National             11.1%                                                             9.5%

California           17.2%                                                             13.2%

Nevada               15.5%                                                             11.8%

Georgia               12.4%                                                             9.2%

Hawaii                12.3%                                                             10.6%

Oregon               12.2%                                                             9.8%

Michigan            11.6%                                                             8.6%

Arizona               11.1%                                                             10.0%

Florida                10.9%                                                             10.9%

Washington       10.5%                                                             10.0%

Maine                 10.4%                                                             10.6%

Rhode Island     10.3%                                                             9.1%

Texas                  10.3%                                                             8.9%

New York           10.2%                                                             10.6%

District of Columbia       10.2%                                              9.1%

Wyoming           9.9%                                                                6.3%

Illinois                 9.3%                                                                8.9%

Utah                    9.2%                                                                9.5%

Colorado            9.0%                                                                7.0%

South Carolina  9.0%                                                                9.6%

Minnesota         8.4%                                                                9.3%

New Jersey        8.3%                                                                8.1%

Idaho                  7.4%                                                                5.7%

West Virginia     7.3%                                                                4.7%

Tennessee         7.2%                                                                7.2%

Montana            7.2%                                                                5.5%

North Carolina  7.1%                                                                7.4%

Massachusetts  7.0%                                                                10.0%

Missouri             6.8%                                                                5.0%

Ohio                    6.7%                                                                5.1%

North Dakota    6.5%                                                                6.3%

Maryland           6.3%                                                               6.3%

Mississippi         5.6%                                                               6.9%

Virginia               5.5%                                                                6.3%

Alabama             5.2%                                                                5.0%

New Hampshire              4.7%                                                                5.2%

Delaware           4.6%                                                                6.7%

Connecticut       4.5%                                                                6.6%

Louisiana            4.2%                                                                4.5%

Kansas                4.0%                                                                4.7%

Indiana               3.8%                                                                6.2%

Vermont             3.7%                                                                6.0%

Pennsylvania     3.5%                                                                5.0%

Nebraska            3.2%                                                                1.9%

South Dakota    3.1%                                                                3.1%

Alaska                 2.9%                                                                4.2%

Iowa                   2.7%                                                                4.2%

New Mexico      2.5%                                                                2.6%

Oklahoma          1.9%                                                                3.8%

Wisconsin          0.9%                                                                4.1%

Kentucky            0.8%                                                                4.1%

Arkansas            -0.3%                                                              3.2%

 

 

 

 

 

 

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