Corelogic® has released it latest Home Price Index report. Not surprisingly, home prices are up across the country. In fact, nationwide home prices are up 12.4 percent Y-o-Y (July 2012 – July 2013).
On a state level, the price of homes in Nevada has increased a remarkable 27 percent during the same period. Not only is Nevada’s home price increase more than double the national average, but for the period July 2012 to July 2013, Nevada’s increase leads the country. The top states in this regard include:
- Nevada 27.0%
- California 23.2%
- Arizona 17.0%
- Wyoming 16.4%
- Oregon 15.0%
The Corelogic® report contains a 2nd metric that provides some interesting perspective to the first. Despite the double-digit gains seen nationwide, home prices remain 17.6 percent below their peak set at the top of the bubble in 2006.
And on a state-level, Nevada’s current home prices show an even greater distance from its peak price, also set in 2006. According to Corelogic’s Home Price Index report Nevada leads the country as the state with the largest distance from its peak value. Nevada’s current home prices are 43 percent below the peak prices set in 2006 for the state. The top states in this regard include:
- Nevada 43%
- Florida 37.4%
- Arizona 32.5%
- Rhode Island 29.7%
- Michigan 27.7%
Are local home prices going to reach their peak set in 2006 anytime soon? No. …nor would we want them to. [Remember what happened last time? — six consecutive years of declining prices.]
Locally we have seen home prices begin to level off. July was the first time since January that the median sales price did not increase. And, although I haven’t posted August numbers yet, the median sold price in Reno-Sparks for August increased a bit over July’s, however is still below the high set in June.
I believe this leveling of home prices is healthy for our market, especially considering the rapid escalation of home prices over the past months. Meanwhile sales remain brisk. Stay tuned tomorrow when I post all the numbers for August.
JR
Excellent insight Guy. Always appreciate your input on our local market! It really helps place things in perspective when comparing the two analyses together. Simply hearing that prices have risen by 27% would make anyone assume we are pushing “bubble territory”. But when comparing to Peak – Trough, we have only corrected a cmore modest 16-18% off the bottom, which is more in line with the national average (Coming from 60-62% off the Peak to 43% per your analysis). Also agree that the leveling off of the current market is actually an excellent sign of us returning to normalcy per the median incomes of our area.
ellen miller
Do you expect ab 300 (or what is it now…ab328?) to bring about foreclosures on the market again, impacting and reducing the price increases as of late?
Thanks
Guy Johnson
Thank you for your comment, JR.
Ellen, I expect to see an increase in foreclosures (bank-owned) properties hitting the market, however a couple things:
1) The increase in new REO’s hitting the market will take a few months because of the length of time the foreclosure process takes — a minimum of 120 days.
2) Because we’re still in a Seller’s Market, particularly at the lower price points, any new inventory would be welcomed and likely absorbed by the existing demand at these price points. We may see a leveling of prices, but I don’t expect to see a dramatic reduction in home prices.