Home Asking Prices Rise 2% in September, Point to Slowdown
NEW YORK (TheStreet) -- Home prices are showing signs of moderating, with the latest report from online real estate information provider Trulia pointing to a cooling down in asking prices.
Asking prices is a forward indicator of sales prices. Trulia's Asking Price Monitor adjusts for the changing composition of homes sold so that it reflects trends in prices of similar homes in similar neighborhoods.
Asking prices rose 2% month over month in September and 11.5% year over year. But the strong monthly report belies the underlying trend of a slowdown.
Quarter over quarter, asking prices rose 3%, the smallest change since February. At the metro level, 89 of the top 100 metro area had quarter-over-quarter increases, down from 97 in June.
Asking prices slowed considerably in some of the hottest markets. In the California cities of Sacramento, Oakland, Orange County, and Los Angeles, asking price gains slowed down 2% or more, even though asking prices in those metros rose more than 20% from last year.
In Oakland, for example, asking prices rose 3.2% in the quarter ended September from the quarter ended June. In June, the quarterly increase was 11.1%.
Atlanta was the only metropolitan where prices are up at least 20% year over year and where asking prices accelerated from the previous quarter.
Meanwhile, Trulia's rent monitor showed rents rose 3% from last year in September, down from 3.9% year over year in June.
"Asking home prices give us the first look at where home sale prices are headed, and they point to a slowdown," said Jed Kolko, Trulia's chief economist. "After rising rapidly in the first half of 2013, asking prices in two thirds of the largest metros are cooling. In fact, asking prices are falling -- not just rising more slowly -- in 11 of the 100 largest metros, the most markets to see prices slip in six months."
Kolko attributed the slowdown to rising mortgage rates, increasing inventory and fading investor activity but warned that a prolonged government shutdown or worse -- a default by the government -- could send the economy and housing into a tailspin.
-- Written by Shanthi Bharatwaj New York.