Home prices continue climbing towards a healthy balance, but leave luxury properties behind.
As has been the trend all year, home prices continued rising in September, according to a new report from CoreLogic. However, despite gains, the rapidity of growth is slowing.
Nationwide, home price growth remained healthy, climbing 5.6 percent year-over-year, including distressed, representing 31 months of consecutive increases. Prices experienced a slight dip month-over-month, but it’s to be expected moving into the winter season.
In Massachusetts, including distressed, home prices eclipsed national gains, rising 8.8 percent year-over-year. Excluding distressed, prices went up 9.7 percent, which could be the result of increased foreclosure activity.
A Better Balancing Act
In its full report, CoreLogic identified a number of positive trends lending credence to the ongoing perception that the nation’s housing market is healing. Those findings include:
- Despite a negligible decline month-over-month, overall home prices, excluding distressed, rose a healthy 5.2 percent in September.
- Drawing from past figures, CoreLogic’s predictive data model suggests home prices will increase 5 percent over the next twelve months.
- Of the 100 areas monitored by the research group, 96 showed year-over-year increases in September.
A Luxury Slow Down
Considering national, and even regional, averages, the housing market is trending in a positive direction. However, the veil of general numbers masks the more nuanced statistical data, which tells a tale of two distinct housing markets: luxury and everyone else.
“There has been a clear bifurcation in home price growth for lower-end versus upper-end properties in 2014,” Sam Khater, deputy chief economist for CoreLogic, said. “As of December 2013, both lower-end and upper-end property prices were up 9.7 percent on a year-over-year basis. As of September, lower-end prices were up 9.4 percent but upper-end prices were up only 4.5 percent.”
The report failed to elaborate on the growing schism between the two property tiers, but it’s likely a reflection, at least in part, to the vast numbers of investors, particularly cash, that have been fleeing an increasingly fair priced market for more lucrative opportunities. Whatever the case may be, CoreLogic CEO and President Anand Nallathambi doesn’t seem especially worried.
“Home prices continue to rise compared with this time last year but the rate of growth is clearly slowing as we exit 2014,” he said. “With more positive macro-economic trends emerging in the U.S., we are forecasting moderate price growth for 2015.”