Home prices in the Salt Lake City market took a small step backward from August to September but are still ahead for the year. On a month-over-month basis, the average selling price of a northern Utah home dropped 0.7 percent, according to the CoreLogic Home Price Index (HPI) released last week. Since September 2016, however, prices are still up 10.2 percent.
CoreLogic is a California-based property information and analytics firm. The prices used in its HPI include distressed sales such as foreclosures and short sales.
Nationally, home prices rose 0.9 percent from August to September and are up 7 percent since last September.
Looking ahead, the CoreLogic HPI Forecast predicts that home prices will increase by 4.7 percent on a year-over-year basis from September 2017 to September 2018, and on a month-over-month basis home prices are expected to decrease by 0.1 percent from September to October. The 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.
“Heading into the fall, home price growth continues to grow at a brisk pace,” said Frank Nothaft, chief economist for CoreLogic. “This appreciation reflects the low for-sale inventory that is holding back sales and pushing up prices. The CoreLogic Single-Family Rent Index rose about 3 percent over the last year, less than half the rise in the national Home Price Index.”
According to CoreLogic Market Condition Indicators (MCI) data, an analysis of housing values in the country’s 100 largest metropolitan areas based on housing stock, 36 percent of cities had overvalued housing stock as of September 2017. 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.
“A strengthening economy, healthy consumer balance sheets and low mortgage interest rates are supporting the continued strong demand for residential real estate,” said Frank Martell, president and CEO of CoreLogic. “While demand and home price growth is in a sweet spot, a third of metropolitan markets are overvalued and this will become more of an issue if prices continue to rise next year as we anticipate.”