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Home Price Monitor January 2012

Affordability remains high and job-hiring data is showing signs of improvement. An improving economy coupled with affordability could provide a needed jolt to primary residence sales.

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National Association of REALTORS®
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100 views13 pages

Home Price Monitor January 2012

Affordability remains high and job-hiring data is showing signs of improvement. An improving economy coupled with affordability could provide a needed jolt to primary residence sales.

Uploaded by

National Association of REALTORS®
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Home Price Monitor

January 2012
National Association of REALTORS
Research Division Cutting Through the Noise: Various Home Price Measure

Highlights
On a month-to-month basis home prices rose slightly in November as measured by NAR, FHFA, and CoreLogics distressed-excluded measure. Declines in November were measured by Case Shiller and CoreLogics full market index. On a year over year basis, small declines persist across measures in November within the range that has been typical of recent months. NAR data show a monthly increase for December and suggest that the decline from December one year ago is smaller than in the 2 previous months. New home prices continue to fluctuate greatly due to low levels of construction and purchase activity.

Distressed sales, which hold back existing home prices, comprised 32 percent of sales in a recent survey of Realtorsdown from nearly 40 percent a year ago but slightly above the recently typical 30 percent mark. The seasonal slowdown in sales may explain the increase in distressed sales as a share of total sales even as the number of distressed sales remains largely constant. The increase in the share of distressed sales may lower reported transaction prices somewhatespecially as seen in the Case-Shiller and CoreLogic indexes.

Outlook
From a broad perspective, many of the same trends continue to dominate the outlook. Low inventories, declining delinquency rates, and stable or increasing foot traffic should help to support prices, though buyers searching for the right home may have fewer options from which to choose. Very limited new construction means that buyers initially searching for a new home may find more selection among existing homes. Client pricing expectations may continue to present challenges. Data from the Profile of Home Buyers and Sellers show that sellers typically sold their homes for 95% of the listing price, and 61% reduced the asking price at least once. Affordability remains high and job hiring data is showing signs of improvement. An improving economy coupled with affordability could provide a needed jolt to primary residence sales. In fact, blue-chip economists believe that a technical bottom to the market is at hand.

Home Prices
$280,000 $260,000 $240,000 $220,000 $200,000 $180,000 $160,000 $140,000 $120,000 $100,000 Nov-01 Feb-02 May-02 Aug-02 Nov-02 Feb-03 May-03 Aug-03 Nov-03 Feb-04 May-04 Aug-04 Nov-04 Feb-05 May-05 Aug-05 Nov-05 Feb-06 May-06 Aug-06 Nov-06 Feb-07 May-07 Aug-07 Nov-07 Feb-08 May-08 Aug-08 Nov-08 Feb-09 May-09 Aug-09 Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11 Nov-11 NAR Median Sales Price: Total Existing Homes, United States ($) New 1-Family Houses: Median Sales Price (Dollars) FHFA House Price Index: Purchase Only, United States (NSA, Jan-91=100) S&P/Case-Shiller Home Price Index: Composite 20 (NSA, Jan-00=100) S&P/Case-Shiller Home Price Index: Composite 10 (NSA, Jan-00=100) CoreLogic National House Price Index (NSA, Jan.2000=100) 280.00 260.00 240.00 220.00 200.00 180.00 160.00 140.00 120.00 100.00

Sources: NAR, Case-Shiller, CoreLogic, FHFA, Census, HAVER

Home Price Data Year over Year Change


25 20 15 10 5 0 -5 -10 -15 -20 -25 Nov-01 Feb-02 May-02 Aug-02 Nov-02 Feb-03 May-03 Aug-03 Nov-03 Feb-04 May-04 Aug-04 Nov-04 Feb-05 May-05 Aug-05 Nov-05 Feb-06 May-06 Aug-06 Nov-06 Feb-07 May-07 Aug-07 Nov-07 Feb-08 May-08 Aug-08 Nov-08 Feb-09 May-09 Aug-09 Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11 Nov-11 NAR Median Sales Price: Total Existing Homes, United States ($) New 1-Family Houses: Median Sales Price (Dollars) FHFA House Price Index: Purchase Only, United States (NSA, Jan-91=100) S&P/Case-Shiller Home Price Index: Composite 20 (NSA, Jan-00=100) S&P/Case-Shiller Home Price Index: Composite 10 (NSA, Jan-00=100) CoreLogic National House Price Index (NSA, Jan.2000=100)

Sources: NAR, Case-Shiller, CoreLogic, FHFA, Census, HAVER

Home Price Changes


Nov-11 Nov-11 Dec-11 Dec-11 Next Monthly Annual Monthly Annual Release Change* Change* Change* Change* Date 2.0% 1.8% 0.8% -1.3% -1.3% -1.4% 0.2% -2.4% -3.6% -4.0% -1.8% -3.7% -3.6% -4.3% -0.6% -1.8% 22-Feb 22-Feb -23-Feb -28-Feb -28-Feb -Mid-Feb -Mid-Feb -2.5% -12.8% 16-Feb 0.3% 0.7% -2.5% -2.5%

Data Series NAR Median Sales Price: Total Existing Homes NAR Median Sales Price: Existing 1-Family Homes FHFA House Price Index: Purchase Only S&P/Case-Shiller HPI: Composite 20 S&P/Case-Shiller HPI: Composite 10 CoreLogic National HPI CoreLogic National HPI - Distressed Excluded New 1-Family Houses: Median Sales Price

------

*All data are not seasonally adjusted. Monthly changes should typically be computed only for Seasonally Adjusted (SA) data. Because these change rates are often covered in the media regardless of their suitability for analysis, they are presented here but should be used with caution. Annual (yr-over-yr) changes computed for Not Seasonally Adjusted (NSA) data give a measure that is not affected by seasonal fluctuations.

Sources: NAR, Case-Shiller, CoreLogic, FHFA, Census, HAVER

Spread of Existing Home Price Changes


Year over Year
10.00 5.00

0.00

-5.00

-10.00

-15.00

-20.00

-25.00

Sources: NAR, Case-Shiller, CoreLogic, FHFA, HAVER

Supply and Demand Factors Inventory


4,500,000 4,000,000 3,500,000 10.0 3,000,000 2,500,000 2,000,000 1,500,000 8.0

NAR Total Existing Homes Avail for Sale at EOP, United States (Units, NSA) (left axis)

14.0

12.0

NAR Months' Supply of Total Existing Homes, United States (Months) (right axis)

6.0

4.0

1,000,000
500,000 0 2.0

0.0

NAR Total Existing Homes Avail for Sale at EOP, United States (Units, NSA) NAR Months' Supply of Total Existing Homes, United States (Months)

Sources: NAR

Supply New Housing Starts and Permits


900 800 700 600 500 400 300 200 100 0

Housing Starts: 1 Unit (SAAR, Thous.Units)

Housing Units Authorized: 1-Unit Structures (SAAR, Thous.Units)

Sources: Census

Underlying Demand Job Growth and Hires


6,000 5,000 4,000 3,000 2,000 1,000 0

-1,000
-2,000

Change in Total Nonfarm Employment (SA, Thous)

JOLTS: Hires: Total (SA, Thous)

Sources: BLS

Potential Job Growth Openings


5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000

JOLTS: Job Openings: Total (SA, Thous)

500
0

Sources: BLS

Housing Affordability
25 250.0 20

NAR Housing Affordability Index: Composite (right axis) NAR Payment as Percent of Income (left axis)

200.0

15

150.0

10

100.0

50.0

0.0

NAR Housing Affordability: Payment as Percent of Income, U.S. (%) NAR Housing Affordability Index: Composite (Fixed + ARM), United States

Sources: NAR

About the Price Data Series


Data Series Strengths/Weaknesses of Data Series NAR Median Sales Price: Total Existing Homes Most timely Data, broad geographic coverage, sourced from MLS and Realtor board NAR Median Sales Price: Existing 1-Family Homes data, data in dollars, total exisiting includes condos and coops Weighted Repeat Sales (WRS) Index, sourced from Fannie/Freddie purchase & FHFA House Price Index: Purchase Only refinance mortgages (excludes FHA, VA, Jumbo, Subprime) S&P/Case-Shiller HPI: Composite 20 WRS Index, sourced from County recorder data, weighted by property value; quarterly national index (not shown), monthly 10 and 20-city metro indexes and S&P/Case-Shiller HPI: Composite 10 composites are 3 month moving averages CoreLogic National HPI Weighted Repeat Sales Index, sourced from database of loan servicing and County CoreLogic National HPI - Distressed Excluded recorder data New 1-Family Houses: Median Sales Price Based on home builder interviews in the Survey of Construction

Sources: NAR, Case-Shiller, CoreLogic, FHFA, Census, HAVER

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