Home prices increased 12.5% this October over last October, according to a report from Case-Shiller, which also reveals that the increase is likely due, not to a reduction in foreclosures, but a tight supply of unsold inventory.
Home price gains are the strongest in eight years, according to the National Association of Realtors, rising in 88% of metro markets, and encouraging real estate investors. Among individual states, home prices rose 25.9% in Nevada, 22.4% in California and 14.2% in Georgia, considered the hottest market because this percentage represents the smallest gap across all states, and is only two percentage points away from the highest year-over-year price increase in thirty-five years. Cities posting growth of 10% or higher include Las Vegas, Los Angeles, Atlanta, Phoenix, Detroit, and Miami, among others.
And there is more good news. The Case-Shiller report lists twelve US cities with double-digit annual returns, along with data proving national home prices have returned to levels not seen since 2004, and only 20% away from those in July of 2006.
For investors, this news couldn’t be better. Those sidelined by a weak market are returning to fuel supply and bring additional balance to demand.
As Prices Rise, the Short Sale Surge Declines
A recent report from RealtyTrac highlights a decline in short sales, which currently represent just 5.3% of all sales, down 11.2% from the previous year. Banks are moving to foreclosure auction sales and bank-owned sales, relieving real estate investors of the short sale method of selling distressed property.
RealtyTrac vice president Daren Blomquist stated, “The combination of rapidly rising home prices — along with strong demand from institutional investors and other cash buyers able to buy at the public foreclosure auction or an as-is REO home — means short sales are becoming less favorable for lenders.”