U.S. home prices in January showed a seasonal decline, down 0.3 percent from December, reflecting flat home sales during the same period, according to the latest FNC Residential Price Index™ (RPI). On a year-over-year basis, home prices rose 6.4 percent from December 2015.
“January is typically a slow month for housing activity, and month-over-month fluctuations in home prices tend to reflect that,” says Yanling Mayer, FNC’s housing economist and Director of Research.
“In San Francisco, for example, home prices dropped 2.0 percent in January, which was largely driven by a sales shift toward lower-priced and smaller homes, thus better viewed as noise in the data rather than a meaningful decline in price,” Mayer adds.
As of January, the proportion of final sales of foreclosed and REO properties comprises 12.7 percent of existing homes sales, up from 10.8 percent in December but down from 14.2 percent a year ago. Sales of foreclosed homes typically peak in January and February.
In the for-sale market, January’s average asking-price discount is 4.4 percent, up slightly from the previous months. Preliminary February data indicates in the average asking-price markdown shows no signs of worsening.
FNC’s RPI is the mortgage industry’s first hedonic price index built on a comprehensive database that blends public records of residential sales prices with real-time appraisals of property and neighborhood attributes. As a gauge of underlying home values, the RPI excludes final sales of REO and foreclosed homes, which are frequently sold with large price discounts, often reflecting poor property conditions.
On a month-over-month basis, January’s top up-markets:
- San Diego (2.5%)
- Orlando (2.1%)
- Denver (1.8%)
- Columbus (1.5%)
- Las Vegas (1.4%)
January home prices were up in only 11 markets tracked by the FNC 30-MSA composite index, with San Diego, Orlando, and Denver showing the largest increase despite weak sales activity.
In California, the steady up-trends in property value remain persistent across the state. The 2.0 percent decline in San Francisco appears driven by a sales shift toward lower-priced and smaller homes. Year over year, home prices in the city rose 11.6 percent in January, the 5th consecutive month of double-digit price appreciation.
In Houston, home prices were down 2.0 percent, or an average of 1.2 percent per month in the last 3 months, likely impacted by job losses in the energy sector from collapsing oil prices. The year-over-year gains have decelerated to 2.7 percent by January. Home prices weakened widely in Northeast.
On a year-over-year basis, January’s top price-growth markets:
- Portland (14.8%)
- Sacramento (13.8%)
- Denver (13.4%)
- San Francisco (12.6%)
- Orlando (12.4%)
- Cincinnati (12.0%)
- Miami, Phoenix (11.9%)
- Las Vegas, San Francisco (11.6%)
In Portland and Denver, January marks the 10th and 12th consecutive month, respectively, of accelerating year-over-year growth in the double digits. Other fast price-appreciating cities include: Sacramento, Orlando, Cincinnati, Miami, Phoenix, Las Vegas, and San Francisco.
While pretty much the rest of the country are seeing solid price appreciation, Baltimore remains the only major city where average property value continues to depreciate year over year, amid weak housing activity and a large number of foreclosed homes. Property values in Columbus also remain relatively distressed.
For more information, visit www.fncinc.com.