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Home Prices Rise But Show Signs Of Slowing
Dated: April 29 2014
Home prices were flat in February across 20 major U.S. cities, according to the Standard & Poor's/Case Shiller home price index released Tuesday. But they hovered at a level 12.9 percent higher than the same month a year earlier.
In the Portland area, prices rose 0.8 percent for the month and 13.3 percent from a year ago.
All 20 cities included in the home-price survey showed year-over-year increases. Portland was one of seven to see home prices rise on a monthly basis in February, while 13 saw declines, which are typical for the season.
"On a month-to-month basis, there is clear weakness," said David Blitzer, the index committee chairman. "Seasonally adjusted data show prices rose in 19 cities, but a majority at a slower pace than January."
The slowing home-price gains are taken as good news by some economists who feared the housing market was overheating. Combined with higher mortgage rates, the rapid increase in prices risks pricing out a significant number of potential buyers.
"Homeownership still represents a good bargain for those that can afford it and can find a suitable home," said Stan Humphries, chief economist at Zillow. But affordability issues are becoming an issue in a few markets, and those problems will only get worse as mortgage interest rates rise."
Other figures show the national housing market remains fragile.
Nationwide, home-sales numbers have weakened over recent months, even accounting for what's typically a slow season. That suggests a cooling market, and perhaps one limited by the a small inventory of homes for sale.
In the Portland area, recent numbers are mixed. Pending sales fell in the year's first quarter compared with the same period a year ago, according to the Regional Multiple Listing Service, but closed sales still outpace year-ago figures.
And Portland-area home prices are rising at a faster rate than much of the rest of the country.
"There are a lot of very real supply constraints," said Tim Duy, a University of Oregon economist. "The demand is still there, despite the higher prices and the higher interest rates."
That's largely because single-family home construction hasn't significantly picked up to add to the supply and ease some of the the pressure on prices, Duy said.
"We had an underbuilding period combined with relatively low prices and relatively low interest rates," he said. "All of that combines to propel prices up pretty steeply. I'm not seeing the degrees of unaffordability we had in the housing boom."
The Case-Shiller index is released on a two-month delay and based on a three-month rolling average, so the numbers released Tuesday reflect data collected in December, January and February.
For Mark Ross, founder of Ross NW Real Estate and professional real estate broker, real estate has always been the career of choice. During his 30 years in the industry, Mark has gained experience in ....
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