Home Prices at Boom Levels in 2013

One would have to go back to the heart of the housing boom to find a period when home prices increased at a more rapid pace than they did in 2013 CoreLogic said today. While prices in December dipped slightly, the December 2012 to December 2013 increase was 11 percent, the highest annual increase since 2005.

The CoreLogic Home Price Index which includes sales of distressed homes dipped 0.1 percent from November to December but the annual increase represented the 22nd consecutive month that prices were higher than in the same month the previous year. The HPI Index that excludes short sales and sales of bank owned (REO) homes increased 9.9 percent on an annual basis in December and rose 0.2 percent from November.

"Last year, home prices rose 11 percent, the highest rate of annual increase since 2005, and ten states and the District of Columbia reached new all-time price peaks," said Dr. Mark Fleming, chief economist for CoreLogic. "We expect the rising prices to attract more sellers, unlocking this pent-up supply, which will have a moderating effect on prices in 2014."

CoreLogic's Pending HPI projects that January's home prices including distressed sales will increase 10.2 percent compared to January 2013 and will ease back by 0.8 percent from December to January. Excluding distressed sales January 2014 home prices are poised to rise 9.7 percent year-over-year and 0.2 percent month-over-month. The CoreLogic Pending HPI is based on Multiple Listing Service (MLS) data that measures price changes for the most recent month.

"The healthy and broad-based gains in home prices in 2013 help set the stage for a continued recovery in the housing sector in 2014," said Anand Nallathambi, president and CEO of CoreLogic. "After six years of fits and starts, we can now see a clear path to a durable recovery in single-family residential housing across most of the United States."

Including distressed sales, the five states with the highest home price appreciation were Nevada (23.9 percent), California (19.7 percent), Michigan (14.0 percent), Oregon (13.7 percent) and Georgia (12.8 percent). Excluding distressed sales, the five states with the highest home price appreciation were Nevada (20 percent), California (16.2 percent), Idaho (12.8 percent), Oregon (11.6 percent) and Florida (11.5 percent).

There were three states that posted modest price decreases in December on the HPI which includes distressed sales; Arkansas, New Mexico, and Mississippi saw prices ease by 1.3 to 2 percent. There were no states in the negative column for the index that excludes distressed sales. Ninety-five of the top 100 Core Based Statistical Areas measured by population showed year-over-year increases in December 2013.

The change from the peak in the national HPI which occurred in April 2006 to the December level was -18.0 percent. Excluding distressed transactions, the peak-to-current change in the HPI for the same period was -13.6 percent.