In 2013 single -family house prices rose 6.3% in the New York region and 13.6% nationally (as measured by the 10-city composite) according to the latest figures from the Case-Shiller Home Price Index. Although the year started with prices in New York 1.7% above the national average, by December prices in New York were 4.6% lower. The rapid increase in prices nationwide in 2013 was driven by the rapid growth in metropolitan areas of the Southwest and California, particularly Las Vegas (25.5%), San Francisco (22.6%) and Los Angeles (20.3%). New York prices had not increased year over year since 2006.
In recent months some of the hotter housing markets saw prices begin to increase more slowly. In New York prices declined by 0.3% between November and December, and nationwide they declined by a slight 0.04%. The usual cooling of real estate markets in the winter months may explain this, but there are other signals that rising prices could be reaching a peak. The press note accompanying the latest figures states:
“Recent economic reports suggest a bleaker picture for housing. Existing home sales fell 5.1% in January from December to the slowest pace in over a year. Permits for new residential construction and housing starts were both down and below expectations. Some of the weakness reflects the cold weather in much of the country. However, higher home prices and mortgage rates are taking a toll on affordability.”
New York prices will likely continue to decline in January and February due to the harsh winter, but we will have to wait to see how they evolve during the year to see if October’s peak was significant.
Next month, coinciding with the release of the first data for 2014, CHPC will begin using the seasonally adjusted Case-Shiller data and the 20-city composite for comparison purposes.