Red Hot Real Estate Cools For The Holidays
Economists say we’re looking at continued home price appreciation nationwide, although at a slower rate over the cooler months. During the last week of November 2013, just as New York City’s Macy’s Thanksgiving Day Parade was threatened by high winds and freezing temperatures, one housing expert called the U.S. residential real estate market “red hot.”
Discussing Standard & Poor’s Case-Schiller Home Price Index, economist Tim Rood of The Collingwood Group cited a 13.3 percent rise year-over-year for the latest 2013 figures available, making September the strongest annualized housing market uptick since February 2006. Zillow’s October Real Estate Market Report showed October at 5.2 percent above the same month last year, off 0.1 percent from September 2013.
Looking at strength over the long term, Rood pointed to a return to pre-recession levels by the close of 2017, with the former Fannie Mae executive suggesting that gains would reach a total of 24 percent over the next four years. Among the mixed bag of key indicators, chief among them is the continued low level of inventory, driving gains much higher than the national average in some locations.
With the West Coast among the nation’s best performers, housing gains for September year-on-year comparisons in San Francisco reach as high as her hills at nearly 26 percent higher, while Los Angeles looks sunny at 22 percent. Las Vegas is hardly a gamble, showing a 29 percent rise over the same month of 2012, with Reno rolling high numbers, too. Other cities cited by Market Watch as the hottest housing markets create a string along the Pacific coastline: Portland, Seattle, Oakland, San Jose, Santa Barbara, Orange County and San Diego.
Despite a slower pace for 19 of the 20 cities included in the S&P index, economists remain optimistic. The Case-Schiller composite, with its three-month moving average since the year 2000, covers about half of all homes in the nation. September housing gains of 0.7 percent, the latest month available, cooled from gains of 1.3 percent in August. The October Zillow report, covering 30 major markets, saw double-digit percentage increases in more than half, with rising stars Las Vegas at 33 percent, California dreamers Riverside and Sacramento at above 30 percent and trendy San Francisco at about 24 percent.
Market watchers will note that price gains also reflect recovery from the deepest losses during the financial crisis. This factor is important, according to Core Logic, in analyzing strong numbers coming out of Nevada at 26.5 percent up, California at 21.4 percent, followed by Wyoming, Arizona and Georgia. It contributes to the current rises in Detroit and in Florida coming off such large falls from peak values in 2008.
Buyers and sellers should anticipate a seasonal holiday slowdown as thoughts turn to gatherings of friends and families, ornamental baubles and bargain shopping of the retail variety. However, as fast as December creeped up on us, 2014 is right around the corner.
Laurie JM Farr is a freelance writer covering all things in her adopted San Francisco. A dedicated urbanite, she’s a transplanted New Yorker by way of a couple of decades in London as a hotel sales and marketing manager. Follow her work on @ReferencePlease, USA Today, Yahoo! and on Examiner.com.