Home prices in the Salt Lake City market continue to show a steady increase, according to data released last week by Californian-based property data and analytics company CoreLogic. The CoreLogic Home Price Index (HPI) showed a 0.7 percent increase in the prices that Utah homes sold for in August compared to July, which brought the year-over-year price hike to 11.9 percent compared to a year ago.
Nationally, the index showed a 0.9 percent increase from July to August with a 6.9 percent growth since August 2016. All prices used in the index include distressed sales such as foreclosures and short sales.
CoreLogic also released its HPI Forecast report which indicates that home prices will increase by 4.7 percent on a year-over-year basis from August to August 2018, and on a month-over-month basis home prices are expected to increase by 0.1 percent from August to September. The CoreLogic HPI Forecast is a projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.
“While growth in home sales has stalled due to a lack of inventory during the last few months, the tight inventory has actually helped stabilize price growth,” said Frank Nothaft, chief economist for CoreLogic. “Over the last three years, price growth in the CoreLogic national index has been between 5 percent and 7 percent per year and CoreLogic expects home prices to increase about 5 percent by this time next year.”
In an analysis of the country’s 100 largest metropolitan areas based on housing stock, 34 percent of cities had an overvalued housing stock in August, according to CoreLogic Market Conditions Indicators (MCI) data. The MCI analysis categorizes home prices in individual markets as undervalued, at value or overvalued by comparing home prices to their long-run, sustainable levels, which are supported by local market fundamentals such as disposable income. Also, in August, 27 percent of the top 100 metropolitan areas were undervalued and 39 percent were at value.
“Nearly half of the nation’s largest 50 markets are overvalued,” said Frank Martell, president and CEO of CoreLogic. “The lack of real estate affordability has spread beyond the typically expensive coasts into the interior of the nation, hitting cities such as Denver, Nashville, Austin and Dallas.”