Johnson City MSA flexes its home price muscle in November


Johnson City MSA’s year-to-year Home Price Index flexed some muscle in November.

According to the just-released CoreLogic HPI home prices in the three-county Johnson City outperformed the national market’s price pace. At the same time, prices in the four-county Kingsport-Bristol MSA slumped after a six-month run of increases.

Johnson City home prices, including distressed sales, increased by 7.1% compared with November 2014. On a month-over-month basis, they were up 2.2% from October.

The national HPI was up 6.3% on the year-to-year comparison and 0.5% higher than it was in October.

Kingsport-Bristol’s November increase was 2.8% from last year and down 1.7% from October.

Home prices on the national level are expected to remain flat from November to December, according to the CoreLogic HPI Forecast. That assessment is a projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state. The forecast is made on the national level only.

“Heading into 2016, home price growth remains in its sweet spot as prices have increased between 5 and 6% on a year-over-year basis for 16 consecutive months,” said Dr. Frank Not haft, chief economist for CoreLogic.

Here in the Tri-Cities, Johnson City’s year-to-year HPI has been positive for 35 straight months. It peaked in September 2013 at 10.5% but has dropped to 1.3% a couple of times. The average performance is 5.8%.

Price performance in Kingsport-Bristol hasn’t been that consistent. The index has been up for seven months but dipped into negative territory twice this year. In March, it showed no change from March 2014. The monthly price weakness first showed up in December 2014 and followed 27 straight monthly up year-to-year gains.

“Many factors, including strong demand and tight supply in many markets, are contributing to the long-sustained boom in prices and home equity which is a very good thing for those owning homes,” said Anand Nallathambi, president and CEO of CoreLogic. “On the flip side, prices have outstripped incomes for several years in a number of regions so, as we enter 2016, affordability is becoming more of a constraint on sales in some markets.”

The CoreLogic HPI is built on public record, servicing and securities real-estate databases and incorporates more than 30 years of repeat-sales transactions for analyzing home price trends.

Generally released on the first Tuesday of each month with a five-week lag, the CoreLogic HPI is designed to provide an early indication of home price trends among that include the Single-Family Combined tier representing the most comprehensive set of properties (including all sales for Single-Family Attached and Single-Family Detached properties).

The indexes are fully revised with each release and employ techniques to signal turning points sooner. The CoreLogic HPI provides measures for multiple market segments, referred to as tiers, based on property type, price, time between sales, loan type (conforming vs. non-conforming) and distressed sales. Broad national coverage is available from the national level down to ZIP Code, including non-disclosure states.

CoreLogic HPI Forecasts are based on a two-stage, error-correction structural model that combines the equilibrium home price–as a function of real disposable income per capita–with short-run fluctuations caused by market momentum, mean-reversion, and exogenous economic shocks like changes in the unemployment rate.

 

 

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