The latest FNC Residential Price Index shows real estate prices in the United States enjoyed a modest increase as both home construction and sales continue to show good growth. According to the article in World Property Journal, nationally property prices increased by 0.4% from November or by 6.2% compared to December 2014.
During the fourth quarter of last year, real estate prices increased by 0.2%. These figures show that new housing starts and home sales and home prices last year finished with good year-on-year growth with figures at a 15 month high since October 2014. Homebuyers in the US are still benefiting from extremely low interest rates and mortgage availability is increasing. The jobs market is also showing good growth and all these factors help allay concerns about falling oil prices and problems with the Chinese economy. It’s expected that the momentum will continue into this year and will result in solid price growth.
Last December, the percentage of sales for bank owned and foreclosure properties accounted for 10.9% of all existing home sales compared to 12.5% a year earlier. Now sales of foreclosure homes are at their lowest level since December 2007. In comparison when the real estate recovery began in early 2012, 20% of home sales were for foreclosure properties. During the fourth quarter of last year, there was not the usual seasonal increase in asking price discounts for homes for sale and the median discount for January was 4% which has barely changed since October last year.
In December property prices increased in two thirds of the market with Baltimore showing the biggest rise at 2.6%. However there is a huge number of foreclosure homes in Baltimore accounting for 20% of total home sales and there are concerns this could affect future price rises. Other cities still affected by large numbers of foreclosures include Tampa, Detroit and Chicago.
Real estate prices in Florida still continued to make reasonable gains in spite of the state still having a large number of foreclosure sales. The Midwest is seen as being the weak spot in the nation’s housing market with prices still being affected by foreclosure sales and large price markdowns are common in the for sale market. In December, the city of Portland showed the largest year-on-year price appreciation at 14.25%, followed by Denver at 13%, San Francisco at 12.6%, Las Vegas at 11.9% and Miami at 11.5%. The cities of Cincinnati, Phoenix and Sacramento also showed price appreciations in double digits.