By Peter Ricci
Asking prices continued to show improvement in the Trulia Price Monitor, a leading indictor of market activity that studies the asking prices of new property listings on the real estate website.
Overall, the Trulia Price Monitor found that asking prices increased 0.8 percent from October to November, which implies a very promising 10 percent annual growth rate. Additionally, asking prices are up 3.8 percent from November 2011 and 2.2 percent from the second quarter.
Trulia Price Monitor – Good News for Prices
November’s increase in asking prices are the fastest rate for the Trulia Price Monitor since the housing downturn began, noted Trulia’s Chief Economist Jed Kolko, with job growth and falling housing vacancies being the main reasons for the increase. Other details from Trulia’s report included:
- Seventy-six of the nation’s 100 largest metro areas saw asking prices rise from last year, and 70 also saw quarterly increases.
- Excluding foreclosures, asking prices rose 1.6 percent quarter-over-quarter and 4.3 percent year-over-year.
- As has been the case in the last couple Trulia Price Monitors, though, rental markets continued to lead the pack, with asking rents rising 5.6 percent from last year.
- Asking rents showed particular strength in Chicago, where they were up 6.9 percent, Miami, where they increased 10.8 percent, and Houston, which led the nation with an incredible 16.8 percent uptick in rents.
Relationship Between Renting and Buying
Given how dramatically rental prices have been increasing in many of the nation’s largest metro markets, it’s fair to wonder what impact, if any, rising rents will have on demand for houses.
Christi Borden, a Realtor with Better Homes and Gardens Real Estate Gary Greene in Katy, said the Trulia Price Monitor’s findings on Houston’s rental market come as no shock to her.
“That doesn’t surprise me at all,” Borden said, adding that with today’s tough lending requirements, many consumers are “forced to rent” and forego pursuing a mortgage.
The incentives to own a home, she added, are still quite strong, what with interest rates at historic lows and the mortgage interest tax deduction an attractive incentive, but as long as lending remains tight, the pendulum will not immediately swing from renting to owning.