National year-over-year price gains, though gaining momentum to finish out 2012 at 4.9%, will experience some moderate growth in 2013 as Clear Capital expects annual home values to fall by more than half compared to last year.
Forecasting 2013 home prices to grow by 2.1%, Clear Capital’s Home Data Index (HDI) Market Report expects the more than 50% reduction will result from a higher starting price base as housing enters a full year into its recovery.
Nationally, home prices in December rose 0.9% over the quarter, what Clear Capital notes was a slight decrease from November’s quarterly growth rate of 1.0%, most likely reflecting pause from buyers who put off purchase plans over the holiday and winter season.
“Quarterly home prices mostly mirrored those of last month and suggest that some buyers took pause in the initial winter months. Yet, looking back over 2012, national yearly price gains of 4.9% are still strong,” said Dr. Alex Villacorta, director of research and analytics at Clear Capital.
Nationwide, four regions posted little quarterly growth.
Both the Midwest and the South each rose 0.6% in December, a stalled momentum compared to summer numbers recorded in July where prices gained 2.1% and 1.5%, respectively for the regions.
The Northeast posted a 0.3% increase over the rolling quarter, nearly unchanged over the prior month’s growth rate.
The West was the only region to see an uptick in quarterly price gains as it posted a 2.1% growth. December home price trends offer further confirmation of the West’s leading charge in the market’s recovery, notes Clear Capital.
“2013 should be interesting for the housing market, where national gains should continue to see upward growth but likely at a more modest rate,” said Villacorta. “Keeping in mind our current gains are off market lows at the start of the year, 2013 gains will be measured against a higher price floor after a full year of recovery.”
Written by Jason Oliva