Perspective is key here. While Las Vegas leads the recovery, its median price of $145,000 ranks it below 35 of the top 50 markets. This suggests low price points are in part driving Las Vegas’ gains. Conversely, San Jose has seen gains of 26.0 percent over the year, despite its high median price of $710,000, an indication that demand is fueled by a strong local economy. As such, these two markets will likely see a variance in their trends moving forward.
The lowest performing metros saw only two out of 15 post quarterly losses, with prices declining less than 1.0 percent for each. Average yearly gains for the group rest at 3.0 percent, evidence that the more active spring and summer buying season have helped buoy most major markets’ home prices.
Detroit home prices have risen 9.6 percent over the last year and while the metro remains on the lowest performing list, its quarterly gains of 1.0 percent are the highest for the group. These gains are particularly impressive against the backdrop of an REO saturation rate of 42.0 percent, more than 27.0 percentage points higher than the national average.
“While July home prices continue to ramp up throughout the country led by Las Vegas posting more than 30.0 percent yearly growth, let’s not forget a healthy recovery means moderation as the new normal takes hold“ says Dr. Alex Villacorta, vice president of research and analytics at Clear Capital. “Over the last half of 2013, we continue to call for a moderation in home price trends. A rising price floor will dampen some potential homebuyers’ appetites, particularly as recent gains bring many markets back into pre-bubble equilibrium. In other words, homebuyers are starting to adjust to the new normal, where steep discounts from the peak are not as attractive as they once were. Having said that, if housing inventory continues rising, it should help alleviate some of the recent pressure on prices, as well as homebuyers’ confidence in the market’s health overall.
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