Johnson City MSA year-to-year home price index gain sees six-year high


Tri-Cities home price continued climbing in February and the pace increased dramatically in the Johnson City MSA.

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February Year-to-year increase in the CoreLogic all-sales home price indexes.

CoreLogic’s February all-sales home price index shows the year-to-year Johnson City increase was 10.5% and 7.3% in the Kingsport-Bristol MSA. The Northeast Tennessee Association of Realtor’s Trends Report showed a year-to-year 1.3% average price increase and a 10.5% drop in Kingsport-Bristol.

The Trends Report is based on single-family existing home sales that were listed on the regional Multiple Listing Service. The CoreLogic HPI is an index derived from repeat-sales transaction data for all home sales.

It’s noteworthy that February’s HPI increase was the largest gain in six years. It has outperformed the Kingsport-Bristol index for five straight months after. The only time the two Tri-Cities MSAs saw a parallel performance was in September and October last year.

Home prices nationwide, including distressed sales, increased year over year by 6.8% in February and increased month over month by 1.1%, according to CoreLogic.

Johnson City’s February month-to-month increase was 4.2%. It was up 2.1% in Kingsport-Bristol.

The CoreLogic HPI Forecast 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.

“Fixed-rate mortgage rates dropped more than one-quarter of a percentage point in the first three months of 2016, and job creation averaged 209,000 over the same period,” said Dr. Frank Nothaft, chief economist for CoreLogic. “These economic forces will sustain home purchases during the spring and support the 5.2 percent home price appreciation CoreLogic has projected for the next year.”

That 5.2% projection is for the national HPI only. CoreLogic does not make a similar projection for MSA level indexes.

HPI

Monthly year-to-year increases in the CoreLogic all-sales HPI

“Home prices continue to rise across the U.S. with every state posting year-over-year gains during the last 12 months,” said Anand Nallathambi, president and CEO of CoreLogic. “Improved economic conditions and tight inventories continue to drive exceptionally strong gains in many markets, especially for homes priced below $500,000.”

 The CoreLogic forecast is 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. With a five-year forecast horizon, CoreLogic HPI Forecasts project CoreLogic HPI levels for two tiers–Single-Family Combined (both Attached and Detached) and Single-Family Combined excluding distressed sales. As a companion to the CoreLogic HPI Forecasts, Stress-Testing Scenarios align with Comprehensive Capital Analysis and Review (CCAR) national scenarios to project home prices under baseline, adverse and severely adverse scenarios at state, CBSA and ZIP Code-levels. The forecast accuracy represents a 95% statistical confidence interval with a +/- 2.0 percent margin of error for the index.

 

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