OfflineHome price increases in February showed the biggest gain since near the top of the housing bubble. The S&P Case-Shiller Home Price Index tracks prices in 20 major markets and posted in February a 9.3% increase over the previous 12 months. This was the biggest 12 month gain in the index since May of 2006. The index had shown a steady 12 month decline in prices almost every month over a five year period through May of 2012. Things turned around again and every month since then prices have been rising.
Analysts tend to agree that this is an unsustainable pace. However, with prices so low when it began, it’s really expected to slow down as they get back to more normal levels.
Hot Markets Creating Pocket Listings
A pocket listing is one that a real estate agent holds out of the Multiple Listing Service, assuming they can get their buyer a better price due to a fast market and high demand. Particularly with higher priced properties, the sellers would rather not list and have a parade of prospects through the home. The agent only shows the home to prospective buyers they believe will pay the best price and can afford it.
The rise in prices, in my opinion, is simply a partial restoration of the huge loss we have seen over the past few years. As the Feds increase mortgage interest rates, we will see prices even out as buyers and investors back away from the feeding frenzy. Additionally, as market confidence improves, more home owners will be willing to place their homes on the market which will stabilize prices as the supply increases.