Extreme Cold is Slowing the National Housing Market
No matter where you live in the United States chances are you aren’t immune to the freezing cold temperatures that have been sweeping the nation this winter. Even the warmest climates are reporting record low temperatures.
Well it seems this is not the kind of weather that leaves consumers excited about going out and shopping for a new home: CoreLogic's January Market Pulse and December Housing Price Index reports tell the story. Even though national prices are up nearly 12% from December 2012, those same numbers are actually down 0.1% from the month before. Meaning that housing prices continue to remain frozen throughout this winter season.
What’s more important to note is the prediction that prices in January 2014 are going to represent a 0.8% decline from December 2013. Based on their month-over-month decline in December and minimal increases since September, the result is home prices are actually dipping below the prices reached in 2013.
Sacramento-Roseville Housing Market Shows Room for Growth
The trend does show that the rate of housing price increase is slowing, but the most telling number is that nationally the housing price index is still 18% below its peak reached in April 2006.
And even though California and the Sacramento-Roseville metro area have seen year-over-year increases of around 20%, their respective housing price indices still remain further from their peaks than the national market. According to CoreLogic’s January MarketPulse Report, California’s HPI remains 21.3% below its peak and Sacramento-Roseville real estate has even more room for growth as it remains 33% below its peak.
To put that number in perspective, home prices in the Sacramento-Roseville metro area would need to increase by 50% to equal its peak price reached during the housing bubble in 2005.
But who knows how much longer the cold will keep the prices of California homes down.
If you’re “In the Market”, it’s time to get Pre-Qualified
If you’re on the fence about buying a home in California in 2014 you should seriously consider getting in touch with a lender to determine what you can afford. The extreme cold is getting the year off to a slow start; use that to your advantage and get in before real estate prices in Roseville and California jump up again. Looking at the national monthly housing price increases in 2013 you can see how rapidly prices begin to increase in the spring.
You might also be thinking, “I’ll just wait till next winter when prices will be lower.” That simply won’t be the case. Remember the report says that housing prices in December were also up 11.8% from December 2012. Those increases being even higher in California and the Sacramento-Roseville real estate markets. The spring heat will be here before you know it, so don't miss out!
John LaRosa, PHA Realty Director of Marketing