Rising prices may be bringing some homeowners out from under water, but tight credit will still preclude many traditional buyers from the market, according to a recent report from San Diego-based DataQuick, a real estate information and analytics provider. As a result, investors will continue to play a major role in the purchase market for the foreseeable future, DataQuick concluded.
Observing 42 of the largest counties in the nation, DataQuick found rising home prices in all counties for the second month in a row during October.
“Homes listed for sale and overall sales will increase as more borrowers find themselves no longer underwater,” commented Gordon Crawford, VP of analytics at DataQuick.
“However, we can expect purchases by investors to continue to be a large share of all purchases, as a lack of affordable properties and tight credit standards will con-
tinue to drive high rental demand and keep many entry-level homebuyers out of the market,” Crawford added.
In particular, “[i]nvestors will especially dominate what would have typically been entry level homes,” according to DataQuick.
Year-over-year home price increases ranged from 4 percent in Fulton County, Georgia, to 33 percent in Sacramento, California, based on DataQuick’s observations. The average price growth over the year across the 42 markets was about 16 percent, well above historical norms ranging between 3 and 4 percent.
While prices rose in all 42 counties in October, DataQuick found home sales decreased in 33 counties. The number of counties reporting declining home sales in October is more than half that of September, according to DataQuick.
Of the counties observed, Shelby, Tennessee, experienced the greatest drop in home sales– a 27 percent decline. Cook and Dupage, Illinois, and Jackson County, Missouri, also posted declines of more than 20 percent in October.
While sales increased in just nine of the 42 counties over the month, 17 counties reported increases for the quarter, and 28 reported annual increases, according to DataQuick’s report.
Foreclosures declined annually in a little more than half the counties and quarterly in a little less than half. Twenty-two counties experienced a decline in foreclosures from September to October, with 18 reporting declines on a quarterly basis. Year-over-year, foreclosures were down in 27 counties DataQuick observed.