Several factors have contributed to the recent recovery, but those same factors may be synonymous with the rapid home value appreciation rates we are seeing on a national level. As 2013 draws closer to the end, nearly half of the states in America are within reach of their 2006 values. According to CoreLogic, reports indicate that 23 states are within 10 percent of their home price peaks.
The return to pre-bubble values is highlighted by a 12.5 percent year-over-year increase in home prices. However, expectations of an inevitable housing boom should be tempered. CoreLogic’s recent Home Price Index acknowledged a more modest appreciation rate between September and October. The month-over-month gain was a meager 0.2 percent. Current conditions have, therefore, allowed the market to slow down.
“In terms of home price appreciation, the housing market appears to be catching its breath as we head into the final months of 2013,” says Anand Nallathambi, president and CEO of CoreLogic. “The deceleration in month-on-month trends was anticipated as strong gains in home prices over the spring and summer slow in line with normal seasonal patterns and the impact of higher mortgage interest rates.”
Despite the recent slowdown in appreciation rates, the following states have seen the highest home price gains year-over-year:
- Nevada (+25.9%)
- California (+22.4%)
- Georgia (+14.2%)
- Michigan (+14.1%)
- Arizona (+14%)
It is important to note that not every state exhibited price appreciation characteristics. CoreLogic’s Home Price Index acknowledged that New Mexico was the only state that witnessed a drop in home values. The Southwest state saw prices fall 0.5 percent year-over-year.
The rate in which homes have appreciated over the last year has brought many within reach of their price peaks in 2006. Sixteen states are all within five percent or less of their peak home prices: Arkansas, Colorado, District of Columbia, Iowa, Louisiana, Nebraska, Montana, New York, North Dakota, Oklahoma, South Dakota, Tennessee, Texas, Vermont, Wyoming, and Alaska.
“The slowdown in appreciation is positive for the housing market as almost half the states are now within 10 percent of their respective historical price peaks,” says Mark Fleming, chief economist for CoreLogic.
By comparison, the following states remain the furthest from their peak values in 2006:
- Nevada (-40.7%)
- Florida (-37.4%)
- Arizona (-31.5%)
- Rhode Island (-29.3%)
- West Virginia (-28%)
While Nevada and Arizona have seen exceptional price growth, they still remain far from their 2006 peak.