Home Price Indices, Apartment Market
- Oct 29, 2014
S&P Dow Jones Indices released its S&P/Case-Shiller Home Price Indices on Tuesday, and they continue to show a deceleration in home price gains. The 10-City Composite index gained 5.5 percent year over year in August, and the 20-City was up 5.6 percent. Both of those metrics were up 6.7 percent year over year in July, pointing to a continued slowdown. Likewise, the National Index gained 5.1 percent annually in August compared to 5.6 percent in July.
The Sun Belt reported its worst annual returns since 2012, led by weakness in all three major California cities — Los Angeles, San Francisco and San Diego. Despite the weaker year-over-year numbers, home prices are still showing an overall increase, as the National Index increased for its eighth consecutive month.
On a monthly basis, the National Index and Composite Indices showed a slight increase of 0.2 percent for August. Detroit led the cities, with the gain of 0.8 percent, followed by Dallas, Denver and Las Vegas at 0.5 percent. Gains in those places were in contrast to a decline of 0.4 percent in San Francisco, along with declines of 0.1 percent in Charlotte and San Diego.
Apartment Market Still Strong
The National Multifamily Housing Council Quarterly Survey of Apartment Market Conditions, which was released on Tuesday, found that U.S. apartment markets expanded across all four areas that the organization measures. The indexes for market tightness (52), sales volume (58), equity financing (54) and debt financing (71) all remained above 50 – indicating growth from the previous quarter.
“The apartment markets are still firing on all cylinders,” Mark Obrinsky, NMHC Chief economist, noted in a statement. “Demand for apartment residences is still strong enough to offset the gradually rising level of new apartment deliveries. Even with occupancy rates at high levels, markets got just a bit tighter in the last three months.”
The survey also asked about apartment demand from demographics beyond the core mid-to-late 20s set. One in five (22 percent) respondents reported a significant increase in the number of Baby Boomers among their residents. A similar share (21 percent) indicated a significant increase in “40-somethings” (Gen X) in their properties. A smaller share of respondents reported increases among single parents (13 percent) and married couples with children (4 percent).
Wall Street continued on its merry way on Tuesday, posting strong gains. The Dow Jones Industrial Average gained 187.81 points, or 1.12 percent, and ended more than 17,000 once more, while the S&P 500 and the Nasdaq advanced 1.19 percent and 1.75 percent, respectively.