US Annual Home Price Appreciation Slows

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IRVINE, CA—Annual home-price appreciation has slowed to single digits in most US metros, according to a report from RealtyTrac. The finding shows a leveling-off of the residential market recovery to more normal fundamentals.

The slowdown can be seen as a good sign on another level, according to OB Jacobi, president of Windermere Real Estate, covering the Seattle market, “Seattle home prices started the year at an appreciation rate of about 15%, but the pace gradually slowed, and we expect prices in 2015 to hover between 4% and 6%. We see that as a good thing, because if home prices keep appreciating in the double digits for two long, we could run into the same boom/bust market of years past. Buyer demand in Seattle has been incredibly strong this year, and we believe this will continue into 2015, but inventory levels, which are at an all-time low right now, should begin to inch up, providing more buyers with a greater selection of homes from which to choose.”

As GlobeSt.com reported last week, the median home price rose during November from a year ago by 15% to $190,000, a figure that was flat compared to the previous month, according to the report. The firm reports that the median sales price of distressed homes—those in the foreclosure process or bank owned—reached a high of $128,625, the highest since December 2009, yet still 35% below the median sales price of non-distressed properties.

Among metro areas with a population of 500,000 or more and sufficient home-price data, those with the biggest annual increase in median sales price were Detroit; Toledo, OH; Dayton, OH; Modesto, CA; and Lakeland, FL. Other major metro areas with double-digit appreciation compared to a year ago included Houston; Memphis; Atlanta; Chicago; Miami; Sarasota, FL; Cincinnati; and Seattle.

Higher-priced homes are gaining market share among total homes sold, according to RealtyTrac. The share of homes priced above $200,000 increased in November, while the share of homes below $200,000 decreased. The biggest increase in share of home sales was in the range of $500,000 to $1 million; sales over $1 million were also up 15%.

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