Median sales prices of U.S. single family homes and condos in October were up 2 percent from the previous month and 16 percent from a year ago, according to RealtyTrac’s Residential and Foreclosure Sales Report.
“This U.S. recovery is largely being driven by investors, and as the lower-priced, often distressed inventory most appealing to investors dries up in a given market, investor activity will slow down in that market and move to other markets with more ideal inventory available,” RealtyTrac Vice President Daren Blomquist said. “This has created a ripple-effect recovery moving out from traditional investor hot spots such as Phoenix, Atlanta and many California markets and into markets such as Charlotte, Columbus, Ohio, Dallas and Oklahoma City.
“More than 32 percent of all singl-family homes and condos purchased so far in 2014 are non-owner-occupied, compared to 68 percent that are owner-occupied,” Blomquist added. “That is the highest share of investor purchases since we began tracking in 2001.”
The October median sales price — which included both distressed sales of homes in some stage of foreclosure and non-distressed sales — was up 37 percent from a trough of $141,000 in March 2012, but still 19 percent below the previous peak of $237,537 in August 2006. Among 97 metropolitan statistical areas with a population of 500,000 or more with sufficient home price data, 20 have reached new post-recession median sales price peaks in 2013 or 2014, including Denver, Pittsburgh, Columbus, Ohio and Charlotte.
“Home prices have risen substantially in the lower price ranges — generally under $400,000. That has led most underwater properties out of trouble,” said Phil Shell, managing broker of RE/MAX Alliance, covering the Denver market, where median home prices reached a new post-recession peak in July 2014. “We are seeing a ‘compression’ in the market because we are experiencing record low inventories. Prices on the low end are coming up, and while the high end is not necessarily coming down, it has flat-lined. So we are seeing prices compress in the middle. A homeowner wanting to move up into the market at $550,000 or above will find substantial value and a terrific opportunity.”
The median sales price of distressed homes — those in the foreclosure process or bank-owned — was $128,701 nationwide in October, 36 percent below the median sales price of non-distressed properties, $200,000. But distressed home prices increased at a faster pace, up 18 percent from a year ago while non-distressed home prices were up 11 percent during the same time period.
“The demand is strong for a lessening distressed inventory and pushing prices to their highest level since 2008,” said Mike Pappas, CEO and president of the Keyes Company, covering the South Florida market. “Additionally, due to the long delay in our judicial foreclosure system we are now seeing a higher quality of distressed inventory being liquidated, although overall home prices have begun to gradually level off over the past few months as the market normalizes.”
Markets with highest home price appreciation
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 Toledo, Ohio (up 33 percent), Detroit (up 27 percent), Cleveland (up 21 percent), McAllen-Edinburg-Mission, Texas (up 21 percent) and Dayton, Ohio (up 20 percent).
Other major markets with double-digit appreciation compared to a year ago included Memphis, Tenn. (up 18 percent), Austin, Texas (up 17 percent), Miami (up 16 percent), Houston (up 16 percent), Cincinnati (up 15 percent), and Chicago (up 15 percent).
“While price appreciation has leveled off month to month, home prices have increased significantly from a year ago and we expect this trend to continue,” said Craig King, chief operating officer of Chase International, covering the Lake Tahoe and Reno, Nev., markets. The median sales price in Reno was unchanged from September to October but up 15 percent from a year ago — the 29th consecutive month with a year-over-year increase in the market.
Markets with accelerating home price appreciation
Home price appreciation accelerated in 45 of the 97 (46 percent) metro areas nationwide, with a population of half a million or more and with sufficient home price data.
Major with the fastest-accelerating appreciation included Cincinnati (15 percent annual appreciation this year compared to 4 percent annual depreciation last year), Cleveland (21 percent annual appreciation this year compared to 2 percent annual appreciation last year), Nashville (13 percent annual appreciation this year compared to 1 percent annual appreciation last year), Charlotte (10 percent annual appreciation this year compared to 1 percent annual depreciation last year) and Columbus, Ohio (14 percent annual appreciation this year compared to 3 percent annual appreciation last year.)
Other major markets with accelerating home price appreciation were Chicago (15 percent annual appreciation this year compared to 11 percent a year ago), Dallas (11 percent annual appreciation this year compared to 7 percent a year ago), Pittsburgh (8 percent annual appreciation compared to 5 percent a year ago), Seattle (10 percent annual appreciation this year compared to 7 percent a year ago), Tampa (15 percent annual appreciation this year compared to 12 percent a year ago) and Baltimore (2 percent annual appreciation this year compared to 0 percent a year ago).
“The continued rise in Seattle median home prices is largely a result of a strong local economy, low housing supply, and high buyer demand,” said OB? Is this correct? Jacobi, president of Windermere Real Estate, covering the Seattle market. The percentage of distressed home sales in Seattle has returned to pre-mortgage crisis levels, with activity being driven by the hardships that have always instigated short sales, such as job loss, divorce, illness and job relocation. Most of the distressed properties have shifted into the outlying areas around Seattle and are selling for well under the median home price.”
Home price appreciation slowed compared to a year ago in 52 of the 97 (54 percent) metro areas nationwide with a population of half a million or more and with sufficient home price data.
Short sales share close to pre-recession levels nationwide, up from year ago in 12 states
Short sales accounted for 5 percent of all residential property sales in October, unchanged from the previous month and a year ago and not far above the pre-recession average of 4.5 percent a month in 2006.
Markets with the highest percentage of short sales were in Orlando (14.2 percent), Lakeland, Fla., (13.0 percent), Palm bay-Melbourne-Titusville, Fla., (11.8 percent), Cape Coral-Fort Myers, Fla., (11.8 percent) and Las Vegas (11.5 percent).
Twelve states saw an increase in short sales share compared to a year ago, including New Jersey (7.1 percent compared to 4.6 percent a year ago), Illinois (9.9 percent compared to 6.6 percent a year ago), Maryland (9.3 percent compared to 7.2 percent a year ago), Ohio (5.4 percent compared to 4.7 percent a year ago), Nevada (10.8 percent compared to 9.8 percent a year ago), California (4.6 percent compared to 4.3 percent a year ago), Michigan (6.5 percent compared to 6.2 percent a year ago) and Arizona (5.8 percent compared to 5.6 percent a year ago).
Bank-owned sales share matches lowest level since January 2011
Sales of bank-owned properties nationwide accounted for 7.5 percent of all U.S. residential sales in October, the same as previous month but down from 9.1 percent a year ago. The share of bank-owned sales in September and October was the lowest share since January 2011.
Markets with the highest percentage of bank-owned sales were in Stockton, Calif. (23.5 percent), Modesto, Calif., (19.3 percent), Bakersfield, Calif., (18.8 percent), Las Vegas (18.6 percent), Riverside-San Bernardino, Calif., (18.3 percent) and Phoenix (16.4 percent).
“Distressed sales remain a small percentage of the overall marketplace in Southern California as prices stabilize and market health continues to improve,” said Chris Pollinger, senior vice president of sales at First Team Real Estate, covering the Southern California market.
Foreclosure auction sales share increases most in Midwest, Rust Belt cities
Sales at the public foreclosure auction accounted for 1.3 percent of all U.S. residential property sales in October, up from 1.2 percent in September and up from 0.7 percent in October 2013.
Markets with the highest percentage of sales at foreclosure auction were Lakeland, Fla. (5.4 percent), Orlando (4.2 percent), Palm Bay-Melbourne-Titusville (4.1 percent), Miami (4.1 percent), Tampa (4 percent) and Las Vegas (3.5 percent).
Markets with the biggest annual increases in share of foreclosure auctions were Des Moines (1.9 percent compared to 0.1 percent a year ago), Akron, Ohio (2.1 percent compared to 0.1 percent a year ago), Philadelphia (1.9 percent compared to 0.1 percent a year ago), Chattanooga, Tenn., (1.3 percent compared to 0.1 percent a year ago) and Fresno, Calif., (0.9 percent compared to 0.1 percent a year ago).
Major metros with an annual increase in share of foreclosure auction sales included Dallas (1.8 percent compared to 0.4 percent a year ago), Cincinnati (1.2 percent compared to 0.3 percent a year ago), Columbus (3 percent compared to 0.7 percent a year ago), San Antonio (1.5 percent compared to 0.4 percent a year ago), Cleveland (2.2 percent compared to 0.6 percent a year ago), Houston (1.6 percent compared to 0.6 percent a year ago), Jacksonville, Fla., (3.5 percent compared to 1.4 percent a year ago), Oklahoma City (1.3 percent compared to 0.8 percent a year ago), Virginia Beach (1.4 percent compared to 0.8 percent a year ago) and Atlanta (2.3 percent compared to 3.3 percent a year ago).