Nationwide, the values of existing properties have been on the rise for some time. That trend was reflected in data for the final three months of 2012, which showed that a larger number of cities saw this type of increase, both on a quarterly and annual basis.
From October to December 2012, the median home prices for existing single-family homes rose in 133 of the nation’s 152 largest metropolitan statistical areas, while just 19 saw declines, according to new data from the National Association of Realtors. That’s up from 120 cities in which home prices rose during the third quarter of 2012, and just 29 that experienced an increase in the fourth quarter of 2011.
As a consequence of all these increases, the national median home price for those properties jumped to $178,900 in the final three months of 2012, up 10 percent on an annual basis from the previous year’s $162,600, the report said. That’s the largest increase seen since the same quarter in 2005, when prices rose 13.6 percent year-over-year.
Further, total existing home sales in the fourth quarter which included both single-family properties and condos rose 5 percent to a seasonally-adjusted total of 4.9 million, up from 4.66 million in the third quarter, the report said. That number was also 12.1 percent more than the 4.37 million sales pace in the fourth quarter of 2011.
“Home sales are on a sustained uptrend, mortgage interest rates are hovering near record lows and unsold inventory is at the lowest level in 12 years,” said NAR chief economist Lawrence Yun. “Home sales are being fueled by a pent-up demand and job creation, along with still favorable affordability conditions and rents rising at faster rates. Our population has been growing faster than overall housing stock, so supply and demand dynamics are very much at play.”
Experts generally believe that home prices will continue to rise at least through the end of this year, if not continue into 2014. However, some caution that the growth during that time could be significantly lower than what the market has seen in the last year or so, as those increases may be unsustainable overall. Currently, many buyers are flooding the market in an attempt to take advantage of the existing high affordability throughout the nation.