For the first time since the peak of the housing bubble, home prices jumped by double-digits in the first three months of this year, according to data from CoreLogic, a sign that inventory is limited and in high demand again.
During the first quarter of 2013, home prices rose 10.2 percent from the year before with more than three-fourths of the metro areas tracked posting yearly price increases. And CoreLogic experts believe the coming months will bring more growth. “Record levels of affordability, a slowly improving job market, and very small inventories of new and existing homes for sale will continue to drive U.S. home price appreciation during the summer,” said David Stiff, chief economist for CoreLogic Case-Shiller in a press release.
Areas that saw some of the sharpest downturns during the mortgage meltdown are now experiencing some of the greatest price rebounds. Five out of the top ten metro areas were in California. The San Jose area had the nation’s top appreciation rate in the first quarter with a 23.7 percent increase from the previous year. It was followed by Phoenix at 22.8 percent, San Francisco at 21.1 percent, Sacramento at 21.0 percent and Las Vegas at 20.9. The others in the top ten were Atlanta, Detroit, Los Angeles , Riverseide, Calif. and Orlando, Fla.
These major price gains are not cause for concern about another bubble though, CoreLogic says. “Although double-digit gains usually indicate unsustainable appreciation and, possibly, bubbles in some metro areas, there is less need for concern now since home prices remain 26% below their peak nationally and are even lower in many metro markets,” said Stiff.
In fact, CoreLogic predicts that home prices start to “decelerate in 2014 as rising home prices and mortgage interest rates erode affordability and demand and supply become more balanced.”