- Previously, we looked at the FHFA and Case-Shiller release focusing on national data trends. Today, we’ll dig a bit deeper to look at more local data at the regional, state, and city or MSA level.
- Monthly FHFA releases data at the Census division level and quarterly it releases state and metro area data. Case-Shiller offers data on 20-cities monthly. Both of these sources confirm the trend seen in NAR measures.
- At the regional level: the most robust home price gains from a year ago were in the West. NAR reported price change of 15.5% in December and 14.6% in January. According to FHFA year over year prices in December 2013 rose 14.9 percent in the Pacific division which includes Hawaii, Alaska, Washington, Oregon, and California and 12.6 percent in the Mountain division which includes Montana, Idaho, Wyoming, Nevada, Utah, Colorado, Arizona, and New Mexico.
- Likewise, NAR data showed the smallest price gains from a year ago in the Northeast (3.5% for the year ending in December and 6.6% for the year ending in January), and FHFA showed a similar pattern. Prices rose 2.7 percent in New England (Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut) and 2.1 percent in the Middle Atlantic states (New York, New Jersey, Pennsylvania) from December one year ago.
- State by state data, pictured below, shows more detail. Some states in the South had very robust growth: Florida, Georgia, and Texas, but the region as a whole had more moderate growth because of states with more modest home price growth or mild declines such as West Virginia, Arkansas, and Mississippi.
- Among cities, Case-Shiller reported the biggest year over year gains in Las Vegas, San Francisco, and Los Angeles. Each had more than 20% year over year gains. The smallest gains in Case Shiller’s cities were Cleveland at 4.5 percent and New York at 6.3 percent. While the cities covered differ, NAR saw similar trends with the largest home price gains in the 4th quarter out West in cities such as Sacramento and Las Vegas. NAR also saw substantial home price gains in Atlanta, a city that showed an 18.1 percent year over year gain by Case Shiller’s measure. In the quarterly release, FHFA produced a similar list of the top-20 metro areas. Again, the specific areas covered are different, but many of the top metro areas on FHFA’s list are out West including Modesto (CA), Stockton-Lodi (CA), and Vallejo-Fairfield (CA) as the top 3.
Taking a closer look at Existing Home Sales price data reveals an interesting trend going on in the market…
- As shown in the chart below, while sales in the lower home-price tiers are falling, sales at the upper end are rising, quite swiftly at the highest end.
- One impact of the fact that home sales are rising at the high end but falling at the low end is that the mix of homes may be changing. In addition to fewer distressed properties, homes selling now may have more bedrooms, square footage, and other valuable amenities than homes that were sold last year.
- This shift in the mix of homes selling has the effect of pushing up the price of the median home sold, which is simply the price of the home where 50 percent of all homes sold were priced above and 50 percent were priced below that sales price.
- In spite of this drawback in the median home sales price, it has advantages of being able to be produced quickly and being a remarkably good leading indicator for other price measures that are less susceptible to the mix of homes issue.
by NAR Research economists Danielle Hale and Hua Zhong
Home sales vary in (mostly) predictable patterns based on the month of the year and the days of the week in each month. Find out what data is the best estimate of real trends and not noise in the housing market in this article.
With the January Existing Home Sales data release, NAR Research released revised seasonal adjusted annual rate (SAAR) data for the last 3 years because we re-estimate and forecast new seasonal adjustment factors. Seasonal adjustment factors are used to try to extract a meaningful trend from the noisy home sales data that has mostly predictable big seasonal moves.
Imagine the headlines: “Home sales plummet 20 to 30 percent in January from December!” followed by “A recovery of 20 to 40 percent in home sales from February to March!” Those would have been the stories every year for the last decade if home sales data were not seasonally adjusted. But how helpful would that information have been for figuring out what was going on in the housing market?
In this article, we present answers to commonly asked questions (particularly from Wall Street analysts and journalists) on seasonality in housing data and a brief discussion of why seasonal factors don’t line up from year to year.
In spite of rising mortgage rates housing has “good fundamentals” and is expected to continue to improve – that is the remark from the new Federal Reserve chairman.
After a little more than a week in her role as the fifteenth, and first female, Chair of the Board of Governors of the Federal Reserve, Janet Yellen testified to the House Committee on Financial Services Tuesday in a lengthy, 6-hour long session punctuated by a few recesses. The major takeaways of her testimony are (1) that monetary policy will continue on its current path of a gradual reduction in quantitative easing as long as there is no notable change in the economic outlook, (2) the current outlook is for continued economic improvement, and (3) the Fed will monitor the outlook and adjust the path of monetary policy in line with expectations.