New Record – New Bubble?

From the WSJ:

U.S. Home Prices Climbed Sharply in October

Home prices went up sharply in October, as the market showed no signs of slowing after setting a record a month earlier.

The S&P CoreLogic Case-Shiller Indices, which covers the entire nation, rose 5.6% in the 12 months ended in October, up from the 5.4% increase reported in September.

The 10-city index gained 4.3%, up from 4.2% in September. The 20-city index gained 5.1% year over year, up slightly from a 5% increase in September.

The hottest markets in the country remain concentrated in the Northwest, as many buyers priced out of the Silicon Valley area flee to secondary tech hubs. Seattle reported a 10.7% increase, Portland reported a 10.3% year-over-year gain, and Denver had an 8.3% increase in home prices.

Month-over-month the U.S. Index rose 0.2% in October before seasonal adjustment. The 10-city remained unchanged, and the 20-city index increased 0.1% in October from September.

After seasonal adjustment, the national index rose 0.9% month over month. The 10-city index and the 20-city index each rose 0.6%.

After seasonal adjustment, all 20 cities saw prices rise in October.

This entry was posted in Housing Bubble, National Real Estate. Bookmark the permalink.

14 Responses to New Record – New Bubble?

  1. grim says:

    NY Metro Commutable – From Trough Year

    Low Tier SFH (Under $297k)
    1YOY – Up 4.7%
    2YOY – Up 8.9%
    3YOY – Up 11.0%
    4YOY – Up 16.4%

    Mid Tier SFH ($297k-$470k)
    1YOY – Up 3.1%
    2YOY – Up 6.7%
    3YOY – Up 8.7%
    4YOY – Up 15.6%

    High Tier SFH (Above $470k)
    1YOY – Up 1.7%
    2YOY – Up 4.3%
    3YOY – Up 6.2%
    4YOY – Up 11.5%

    1YOY – Up 4.3%
    2YOY – Up 12.4%
    3YOY – Up 18.7%
    4YOY – Up 29.9%
    5YOY – Up 35.5%

    Caveat – The SFH indices are more of a donut around NYC, which include less NYC-specific activity, where the condo index includes a more significant portion of NYC activity. This is not a pure typology comparison.

  2. grim says:

    From the Record:

    Home prices in region edge up 1.7 percent

    Home prices in the region rose over the past year, but they continued to grow at a much slower pace than the national averages, the S&P CoreLogic Case-Shiller home-price index said on Tuesday.

    Single-family-home values in the New York metropolitan area edged up by a scant 1.7 percent over the 12 months ended October, compared with a national bump of 5.6 percent, according to Case-Shiller.

    Home prices in the New York metropolitan area, which includes North Jersey, are equal to the levels of late 2004 and are still about 14.7 percent below their peaks in mid-2006, during the housing bubble.

    Nationally, after the worst housing crash since World War II, prices have rebounded to the peaks they reached in mid-2006.

    There are several reasons home prices are lagging in the state, including weak job creation and a backlog of distressed properties still in the foreclosure pipeline. New Jersey’s unemployment rate was 5 percent in November, compared with a national rate of 4.6 percent. Employers created 21,400 jobs in the state in the 12 months ended November, trailing the national pace.

    Case-Shiller does not break down prices by county. But according to New Jersey Realtors, Bergen County single-family home prices rose 1.1 percent in October compared with levels a year earlier, to a median $440,000. In Passaic County, prices dropped 3.4 percent, to a median $285,000.

  3. grim says:

    From the WSJ:

    Housing Gains Highlight Economic Divide

    The volatile housing market of the past 15 years is widening the divide between pricey urban and coastal areas and more affordable inland regions, creating large swaths of winners and losers based largely on geography.

    Average U.S. home prices rose 5.6% in the 12 months through October, according to the S&P CoreLogic Case-Shiller National Home Price Index, which covers some of the U.S.’s largest metropolitan areas.

    Prices in these areas plummeted 27% from the peak of the housing boom in 2006 to the bottom of the bust in 2012, but set a record high in September, according to the index. Adjusted for inflation, prices are still roughly 15% below the peak.

    Much of the spoils have been concentrated on the high end. A study by Weiss Analytics, a housing-data firm, found homes in ZIP Codes where the median value is $500,000 to $1 million are now worth 103% more than they were 16 years ago, before a boom in the mid-2000s was followed by the worst housing crash since the Great Depression. Home prices in those areas have shot up 39% since the bust.

    Yet many places around the U.S. missed out on the recent boom, with prices remaining essentially flat during the same period. In ZIP Codes where the median home was worth $100,000 to $150,000, prices have risen 16% since the trough of the market and are now worth 24% more than they were in 2000.

    Urban areas have benefited in recent years from an influx of younger workers seeking high-paying jobs. At the same time, land-use regulations have constricted supply, helping drive up prices. While the wealthiest homeowners had a rocky ride during the past decade, their homes have recovered most or all the value they lost during the bust.

    In more rural areas outside major cities, demand for housing has been flat, with little new supply and more people leaving for larger cities and coastal regions.

  4. grim says:

    Nikki Cozza, a 32-year-old interior designer, and her husband, Trevor, searched for two years for a home they could afford in the Rutherford, N.J., area, without luck. Decent homes in the area were priced at about $500,000 and offered about 2,000 square feet, they said. In one instance, they were outbid by about $60,000.

    Because they both grew up in the Scranton, Penn., area, in Lackawanna County, they decided to look for homes there. Soon they were able to find one for about $150,000 less than the New Jersey properties they were considering. It is fairly new, with 3,500 square feet and an ample backyard for their young son, they said.

    Ms. Cozza said the area’s economic challenges concerned them.

    “That did weigh on [my husband] heavily. It was something he did think about, just because there isn’t a lot of large industry or businesses here,” she said.

    For now, Ms. Cozza and her husband, an auditor, work from home most days to avoid the nearly two-hour commute to New Jersey. But she said there are local efforts to rebrand the area.

    “We feel confident that there could be a little movement here,” she said.

  5. Juice Box says:

    Can always go work for Dunder Mifflin

  6. Juice Box says:

    Dow 20K is today

  7. Juice Box says:

    Trump Effect…

    “Consumer Confidence improved further in December, due solely to increasing Expectations which hit a 13-year high (Dec. 2003, 107.4),” said Lynn Franco, Director of Economic Indicators at The Conference Board. “The post-election surge in optimism for the economy, jobs and income prospects, as well as for stock prices which reached a 13-year high, was most pronounced among older consumers. Consumers’ assessment of current conditions, which declined, still suggests that economic growth continued through the final months of 2016. Looking ahead to 2017, consumers’ continued optimism will depend on whether or not their expectations are realized.”

  8. Brazilian Butt Lift says:

    Grim, thanks for posting condo stats. Media continues to ignore the these figures despite an obvious separation between condo and house prices over past 10 years, a trend that would make an interesting story. When I suggest the idea to journalists, I feel like I am having a conversation with a wall.

  9. JJ says:

    Scranton – Better Water than Flint.

    But she said there are local efforts to rebrand the area.

  10. Essex says:

    10:34 — nice….

    Scranton — When Reading just won’t do.

  11. JJ says:

    Scranton – More Methodone, Fewer Syringes

  12. chicagofinance says:

    Easier to pronounce than Wilkes-Barre……

    JJ says:
    December 28, 2016 at 12:14 pm
    Scranton – More Methodone, Fewer Syringes

Comments are closed.