Real estate website Trulia has released the latest findings from its price and rent monitors that show nationwide asking prices for for-sale homes were virtually unchanged in May, compared to the same month last year. Rents, however, increased substantially from last year in the largest metro areas in the country.
Trulia's price and rent monitors are the earliest leading indicators available of trends in home prices and rents. Based on the for-sale homes and rentals listed on Trulia, these monitors take into account changes in the mix of listed homes and reflect trends in prices and rents for similar homes in similar neighborhoods through May 31, 2012.
Asking prices on for-sale homes - which lead sales prices by approximately two or more months – were unchanged in May month-over-month, seasonally adjusted. Together with increases in April and March, asking prices in May rose nationally 1.6 percent quarter over quarter. Year over year asking prices fell slightly by 0.2 percent. Nationally, 41 out of the 100 largest metros had year-over-year price increases, and home prices in 86 out of the 100 largest metros increased in comparison to the previous quarter.
In the metro areas of San Francisco and San Jose, asking prices increased year-over-year and compared with the previous quarter. In San Francisco, the year-over-year asking price showed a slight increase of 0.1 percent and a 0.3 percent quarter-over-quarter increase. In the San Jose metro area, the year-over-year asking price change was up 3.7 percent and the quarter-over-quarter change was 2.9 percent.
Rents have jumped substantially in the San Francisco and San Jose metro areas, as well. Trulia's rent monitor indicates in San Francisco, rents in May rose 14.4 percent compared to May 2011. In the San Jose metro area, rents were up 9.1 percent year-over-year.
"Price and rent increases in the San Francisco and San Jose show the economies of these metros are on a strong rebound. The surge in tech hiring has contributed much to the low vacancy rate for rental units. Recent reports indicate San Jose and San Francisco have a rental vacancy rate of 3 percent or less," said Suzanne Yost, president of the Silicon Valley Association of REALTORS®. "If rents continue increasing, buying a home will become more attractive than renting, especially if mortgage interest rates remain low. Many homes in some areas are already receiving multiple offers."
According to Trulia, rents are up in all of the largest markets, except in Las Vegas, where rents declined 2.5 percent in May year-over-year. Nationally, rents were 6 percent higher than they were a year ago - up from the 5.4 percent year-over-year rent increase in April, and 4.8 percent in March. Rents in Oakland, Miami and Denver are up over 10 percent year-over-year.
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 email or call the SILVAR office at (408) 200-0100.