by Calculated Risk on 1/03/2013 10:05:00 AM

Press Release: Asking Prices Up 5.1 Percent Nationally Year-Over-Year, While Rents Rose 5.2 Percent

In December 2012, asking prices increased 5.1 percent nationally year-over-year (Y-o-Y), marking a huge turnaround from being down 4.3 percent in December 2011. Moreover, not only are prices rising, these gains have accelerated in the last year. Quarter-over-quarter price changes were 0.8% in Q1 (March 2012), 0.4% in Q2 (June 2012), 1.4% in Q3 (September 2012), and 2.3% in Q4 (December 2012), seasonally adjusted.

Asking home prices increased the most in Phoenix, which rose 26.0 percent Y-o-Y in December 2012; however, Las Vegas and Seattle experienced the year’s most dramatic price turnarounds. Both had price gains of more than 10 percent in 2012 after declines of more than 10 percent in 2011. Overall, 2012 marked a huge turnaround year for most local housing markets. In fact, prices rose in 82 of the 100 largest metros at the end of December, compared with just 12 out of 100 in 2011.

Nationally, rents rose 5.2 percent Y-o-Y. Throughout 2012, rent increases Y-o-Y remained around 5 percent, even though asking price increases accelerated and have almost caught up with rent gains at year’s end. Locally, rents rose most in Houston, Oakland and Miami. Rent increases surpassed price increases by a wide margin in Houston, Chicago, Philadelphia, and Baltimore. In contrast, prices grew much faster than rents in Phoenix, Las Vegas, Riverside-San Bernardino, and Sacramento. Overall, prices rose faster than rents in 17 of the 25 largest rental markets in 2012.

“The housing market enters 2013 with a running start,” said Jed Kolko, Trulia’s Chief Economist. “Price gains picked up steam in 2012, starting with modest increases early in the year and accelerating in the third and fourth quarter. In 2013, rising prices will encourage more new construction and will encourage some homeowners to sell, which will help alleviate the current inventory shortage.”

More from Jed Kolko, Trulia Chief Economist: Asking Home Prices Up 5.1% in 2012, Huge Turnaround After Falling 4.3% in 2011

These asking prices are SA (Seasonally Adjusted) - and adjusted for the mix of homes - and this suggests further house price increases over the next few months on a SA basis.