Residential real estate is showing some signs of a slowdown.
According to S&P/Case-Shiller, nationwide home prices posted a 4.7% annual gain in November 2014, compared to a 10.7% annual gain in November 2013. In other words, while home prices continue to show gains, the rate at which they are increasing has been steadily slowing.
“Prospects for a home run in 2015 aren’t good. Strong price gains are limited to California, Florida, the Pacific Northwest, Denver, and Dallas. Most of the rest of the country is lagging the national index gains. Moreover, these price patterns have been in place since last spring. Existing home sales were lower in 2014 than 2013, confirming these trends.” says David Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices.
While its true average existing homes sales in 2014 were lower than average sales in 2013, the monthly data from the National Association of Realtors suggests existing home sales are more sporadic, and despite a 9-month low in January 2015 and a downward trend generally, sales volumes was higher than a year ago.
Lawrence Yun, NAR chief economist, said the housing market got off to a somewhat disappointing start to begin the year with January closings down throughout the country. “January housing data can be volatile because of seasonal influences, but low housing supply and the ongoing rise in home prices above the pace of inflation appeared to slow sales despite interest rates remaining near historic lows,” he said. “Realtors® are reporting that low rates are attracting potential buyers, but the lack of new and affordable listings is leading some to delay decisions.”
It will be interesting to see what happens with both sales volume and prices in the upcoming spring home buying season. This post talks about national trends.
What are you seeing in your area?