Trulia is all about reports and analysis published periodically which helps to guide the consumer and realtors. I have posted many blogs in the past regarding various Trulia’s reports and this blog post is one of that kind about recently published report about rising asking prices.
Trulia Price Monitor is one of the earliest leading indicator of how asking prices trending nationally and locally. They adjust for the changing mix of listed homes and therefore show what’s really happening to asking prices. Because asking prices lead sales prices by approximately two or more months, the Monitors reveal trends before other price indexes do.
Many markets have shown big price gains whereas others are not. It doesn’t mean their housing market is doing good as per Trulia’s report explained below.
Most Housing Markets with biggest Price gains aren’t really healthy. Huge price gains in Phoenix and elsewhere are not necessarily a healthy sign. As part of our 2013 housing outlook, we ranked the 100 largest metros on the health of their housing markets, based on three market fundamentals: strong job growth, low vacancy rate, and low foreclosure inventory. On this list of healthiest markets, Houston ranked #1.
Weaknesses on these fundamentals are red flags for a local housing market – even when prices are galloping ahead. Few of the markets with the biggest price gains are “healthy” in terms of these fundamentals: eight of the 10 top price gainers were in the bottom half of the “healthy markets” ranking. For example, Detroit – despite a 14.2% price increase – was dead last, ranked 100 out of 100. None of the 10 markets with the largest price gains was also among the top 10 healthiest markets for 2013, though San Francisco came close, with the 11th largest price increase and the 2nd healthiest market.
Although most of the housing markets with big price gains exhibit unhealthy fundamentals, some markets with rising prices are healthy. Furthermore, modest price increases aren’t necessarily a sign of poor health: markets with flat or falling prices include both healthy and unhealthy markets. Looking at both price gains and market health reveals four types of local housing markets: Booming, Humming, Rebounding & Struggling.
Booming markets have big price increases and healthy market fundamentals. Their price gains are supported by strong job growth, and future foreclosures are unlikely to threaten today’s price increases. San Francisco, Seattle, Denver, San Jose, and Salt Lake City are the best examples of booming markets.
Humming markets have strong market fundamentals without dramatic price gains. They’re humming along after avoiding the worst of the housing bubble and bust. Moreover, many are now seeing lots of construction activity. Houston, Boston, Raleigh, and Dallas are good examples of humming markets.
Click to read the full report and know about Rebounding and Struggling …
This scatter plot shows that price gains and market health often don’t go hand-in-hand:
In the plot, Houston is plotted on top in the Humming zone which means Houston housing market is in the right track to move towards Booming when the economy really turns around. Many areas in Houston are really turning as seller’s market and many listing agents are trying to be more protective of their clients. They don’t want to come to the table just to close the deal and don’t want to leave out money for seller’s. They are educating clients about the market and telling them wait and hold on to avoid selling lower.
With low inventory and more demand, it seems like asking prices are poised to go up more in Summer. Watch out and work with a Realtor to guide you in making the smart decision on your home purchase price.