Could some of the most in-demand housing markets be cooling off?
Trulia: Asking prices rising, but construction remains low
Monthly and quarterly price growth normal, but annual growth at lowest rate in 11 months; rents increased 4.5 percent nationally year-over-year
April data from the Trulia Price Monitor showed asking prices up 0.8 percent monthly and 2.8 percent quarterly, continuing the rapid climb of recent months. Year-over-year totals, however, showed prices up just 9 percent, the lowest rate in 11 months.
Trulia economist Jed Kolko attributes the slowdown in annual growth to timing — the largest price spike of 2013 occurred between February and April, so the April 2014 numbers no longer include those months.
In total, 97 of the nation’s 100 largest metros reported quarterly and annual asking price increases. The top 10 metros with the greatest price increases were:
1. Riverside-San Bernardino, Calif. (21 percent)
2. Las Vegas (20 percent)
3. Oakland, Calif. (19.3 percent)
4. Sacramento, Calif. (19 percent)
5. Detroit (16.9 percent)
6. Bakersfield, Calif. (16.6 percent)
7. Atlanta (16.1 percent)
8. Orlando, Fla. (15.2 percent)
9 Warren-Troy-Farmington Hills, Mich. (15 percent)
10. Los Angeles (14.9 percent)
Among those top 10 metros, however, only Los Angeles showed construction activity above the 1990-2012 average. In fact, four of the top five metros reported construction activity was less than half of the 1990-2012 average, indicating that large price increases do not necessarily correlate with increased construction.
The top five metros with the greatest increases in construction activity were:
1. San Francisco (185 percent)
2. San Jose, Calif. (147 percent)
3. Austin, Texas (145 percent)
4. Middlesex County, Mass. (143 percent)
5. Oklahoma City (139 percent)
None of those five cities experienced an asking price increase greater than 12.5 percent.
Rental prices nationwide were up 4.5 percent from April 2013, according to the Trulia Rent Monitor. Though the increase appears modest, affordability was severely impacted, particularly in Miami and New York. In both cities, the median rent for a 2-bedroom unit now accounts for 62 percent of the average local wage. Los Angeles and San Francisco weren’t far behind, at 54 percent and 51 percent, respectively.