Housing performance in February continued to steadily improve as it has in prior months with an increase in home prices and a decrease in foreclosures, despite a decrease in sales, according to a monthly Property Intelligence Report (PIR) from DataQuick. The PIR notes that housing markets hit hardest by the market downturn–Arizona, California, Florida and Nevada–have experienced a rebound in home prices that has not yet been experienced in the rest of the country. Home price growth in those states exceeded 10 percent over the last year; while remaining market rates hovered around 2.5 percent.
“The increase in home price growth was positive in 34 of the 42 counties we highlight in every monthly PIR over the last month and quarter; revealing that the markets continue to rise toward a certain stabilization despite looming economic factors,” said Gordon Crawford, Ph.D., vice president of Analytics for DataQuick. “Recent home price growth rates, however, might be overcompensating for an overcorrecting decline in home prices during the downturn. As a result, we expect the growth rates in these markets to slow to a level that is more in line with the rest of the country’s home price growth.”
February’s housing outlook reports positive supply and demand factors, but it is uncertain as to whether or not these improvements will persist throughout 2013. Although the unemployment rate fell to 7.7 percent in February, and the number of housing starts and permits increased, Crawford reports that the market is still stabilizing and trying to reach normal levels of success found in the past.
“Uncertainty factors lead to a difficult time valuing real estate; dampening the activity of both buyers and sellers,” said Crawford. “Employment rose by 236,000 jobs in February, and although that is a favorable number, we have seen this in previous years where employment growth is positive, only to decline in later months of the year.”
Crawford notes that other uncertainty factors including unsustainable deficit levels and other domestic fiscal issues, eurozone fiscal issues, and the country’s situation with Iran, contribute to the housing market’s instability and raises the question as to whether or not home prices can level out to stabilize the still fragile market.
DataQuick’s PIR leverages its national property database and analytics expertise to assess 42 of the largest counties in the United States using valuation trends, REO inventory trends and sales trends metrics. Key findings for February include:
► Home price growth was positive in 34 of the 42 reported counties over the last month and quarter
► Home price growth was positive in 35 of the 42 reported counties over the year
► Sales increased in 22 of the 42 reported counties over the last month
► Sales increased in 17 of the 42 reported counties over the last quarter
► Sales increased in 30 of the 42 reported counties over the last year
► Foreclosures decreased in 24 of the 42 reported counties over the last month
► Foreclosures decreased in 26 of the 42 reported counties over the last quarter
► Foreclosures decreased in 25 of the 42 reported counties over the last year