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Marked recovery in asking home prices in 2012

Wednesday, January 9, 2013

The latest findings from a real estate information website shows asking home prices rising 5 percent in 2012, signaling a big turnaround in a number of housing markets nationwide. Nationally, rents are up 5 percent, though prices are rising faster in some major metros. The local metro areas of San Jose and San Francisco are among the cities that have consistently experienced increases in both asking home prices and rent.

Trulia, the real estate website which gives home buyers, sellers, owners, and renters information on properties, places, and real estate professionals, released information early this month that shows in December 2012 asking prices increased 5.1 percent nationally year-over-year, a marked improvement from being down 4.3 percent in December 2011. Moreover, these gains have accelerated in the last year. Quarter-over-quarter price changes were 0.8 percent in Q1 (March 2012), 0.4 percent in Q2 (June 2012), 1.4 percent in Q3 (September 2012), and 2.3 percent in Q4 (December 2012), seasonally adjusted.

Overall, 2012 was a better year for most local housing markets. In fact, prices rose in 82 of the 100 largest metros at the end of December, compared with just 12 out of 100 in 2011, according to Trulia's price monitor. Asking home prices increased the most in Phoenix, rising 26 percent year-over-year in December 2012, while Las Vegas and Seattle experienced the year's most dramatic price turnarounds. Both of these metros had price gains of more than 10 percent in 2012 after declines of more than 10 percent in 2011. Year-over-year asking prices increased 16.1 percent in San Jose and 11.9 percent in San Francisco.

Meanwhile, rents continue to climb. Nationally, rents rose 5.2 percent year-over-year. Year-over-year rent increases throughout last year hovered around 5 percent, even though asking price increases accelerated and almost caught up with rent gains at the end of the year. Houston, Oakland, and Miami had the highest rent increases. Rent increases surpassed price increases by a wide margin in Houston, Chicago, Philadelphia, and Baltimore.

Trulia reports overall, prices rose faster than rents in 17 of the 25 largest rental markets in 2012. Prices grew much faster than rents in Phoenix, Las Vegas, including Riverside-San Bernardino, Sacramento, San Francisco and San Jose. Year-over-year rents rose 5.2 percent in San Francisco and increased 4.5 percent in San Jose.

"We are fortunate that our region's housing market has been on the rebound sooner and quicker than other markets, especially in the last six months," said Carolyn Miller, president of the Silicon Valley Association of REALTORS®. "We expect 2013 will be an even better year for our market. While inventory continues to be tight, sellers are seeing that home values are recovering and may be convinced that this year would be a good time to put their home on the market."

Another sign of an improving U.S. housing market is the latest report that the number of metropolitan areas on the National Association of Home Builders/First American Improving Markets Index (IMI) rose for a fifth consecutive month to 242 in January 2013. This is up from 201 markets listed as improving in December.

The IMI identifies metro areas that have shown improvement from their respective troughs in housing permits, employment and house prices for at least six consecutive months. According to the index, in San Jose, housing permits rose 6.3 percent from their trough date in March 2009. In San Francisco, permits were up 2.4 percent from February 2009, their permit trough date.


The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.

The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.

Variations of this article have appeared in local area newspapers.

For further information, please contact Rose Meily at SILVAR Public Affairs, email , or phone (408) 200-0109.

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