The index is an analysis of home price trends during the fourth quarter of 2013 in more than 380 U.S. markets, and offers more current revisions and deeper data than the more contemporaneous reports.
Home prices nationwide were 20% above the trough reached in the fourth quarter of 2011, but remained 21% below the peak reached in the first quarter of 2006. The analysis projects that price appreciation is expected to slow across all U.S. markets to 5.3% nationally through the end of 2014, slightly above its long-term annual average of 4.5% recorded since 1975.
“Limited construction of new homes and low inventories of existing homes for sale contributed to the jump in prices,” said David Stiff, principal economist for CoreLogic Case-Shiller. “Developers remain cautious about building too many new houses until they see stronger demand in their markets.”
The largest metropolitan areas, defined as those with populations greater than 950,000, that experienced the most rapid appreciation rates on a year-over-year basis compared to fourth quarter 2012 were Las Vegas (+26%), Riverside, Calif. (+24%) and Oakland, Calif. (+23%). The three largest metropolitan areas that experienced no change were Oklahoma City, and Tulsa, Okla. and Virginia Beach, Va.
“There are a number of metropolitan areas that have reached new price peaks, including Houston, Dallas, Denver, Honolulu and Pittsburgh,” Stiff said. “These cities have never achieved price levels quite this high, not even in the record year of 2006.”
Of the largest metropolitan areas, those with the greatest projected year-over-year gains through the end of 2014 are Tucson, Ariz. (+11%), Rochester, N.Y. (+9%) and Hartford, Conn. (+9%). The largest metropolitan areas with the smallest projected gains are Nashville, Tenn. (+2%), Sacramento, Calif. (+2%) and Warren, Mich. (+2%).
“For the remainder of 2014, investor demand and sales of foreclosed properties should drop off quickly. Traditional buyers are returning slowly to the market, but cannot replace demand from investors who led the market in recent years,” Stiff said.