Despite the past few months of increasing home prices, the most recent edition of the Homes.com Local Market Index Reports indicates that market activity was relatively slow during October. There are now 110 (36%) of U.S. markets that have achieved a full recovery, slightly lower than last month’s total of 111 or 37% of all markets measured in these reports.
Although there were increases in inventory, a slowing demand caused many markets across the country to witness a flattening of home prices during the summer and fall months. Since winter is typically the slow season for real estate sales, don’t be surprised if we begin to see some markets starting to fall back under the full recovery line.
Let’s take a closer look at the markets measured in these reports:
Top 100 Markets
In what seems to be a recurring trend, the Provo-Orem UT and Nashville, TN markets continued to inch their way closer to fully recovering their home prices with respective rebound rates of 99.95% and 99.40%.
As mentioned earlier in the article, there has recently been a low number of large markets reporting gains because of flattening price increases. In fact, only 58 of the top 100 markets increased their 3-month average index point change in October. Unfortunately, this is nine markets less than September and 18 markets less than the total in August.
Monthly percentage gains varied from a low of -0.41% to a high of 0.40%. Baton Rouge, LA reported the highest gain of 0.40% and New Orleans was close behind with a gain of 0.39%. This is evidence that the top ten markets are clearly appreciating at a much slower rate compared to this time last year.
In regards to annual changes in the top ten markets, price gains ranged from a low of 5.71% to a high of 7.63%. This shows a far slower increase in these markets compared to reports from the beginning of the fourth quarter of 2013.
There are now 71 midsize markets reporting a full rebound, down only a single market from last month’s report. Tuscaloosa, AL made it on the list of fully recovered markets back in March, but fell from this position in October with a 99.95% rebound rate. With the loss of Tuscaloosa, the total number of metro areas achieving a full recovery has dropped to 100, or 36% of all U.S. markets.
The good news is that only 14 of 133 markets witnessed a decline in price gains during October, which could mean that they are seeing price appreciation in the short term. With that being said, sluggish price gains are still present from a long-term perspective. The average annual price appreciation for these markets was 3.90% during October, which is a whopping 53% lower than the same time last year when it was a solid 8.36%. Finally, Rapid City, SD had the highest annual gains and Wichita Falls, TX reported the highest 3-month average increase, with respective rates of 8.24% and 0.48%.
Regional Performance for Top 10 Markets
When examining the top ten markets for 3-month average gains in October, nine were from the South and one was from the West. For price gains on an annual basis, seven markets came from the West, two came from the Midwest and one represented the South.
Although October didn’t quite match up to the performance of previous months, it’s important to note that seasonal dips in demand are typical this time of year. Despite this less than stellar performance, most experts expect that 2015 will prove to be a positive year for the nation’s housing market.
Check out the full report from October for more details.