Housing Markets With The Biggest Price Rebounds Still Lag In Construction Activity, Reports Trulia

Trulia, Inc. (NYSE: TRLA), a leading online marketplace for home buyers, sellers, renters, and  real estate professionals, today released the latest findings from the  Trulia Price Monitor and the  Trulia Rent Monitor. These indices are the earliest leading indicators available of trends in  home prices and rents. Based on for-sale homes and rentals listed on Trulia, the monitors take into account changes in the mix of listed homes and reflect trends in prices and rents for similar homes in similar neighborhoods through August 31, 2013.

Despite Rise in August, Asking Home Price Slowdown Continues

Asking home prices rose 11.0 percent year-over-year (Y-o-Y) and 1.2 percent month-over-month (M-o-M) in August. However, a closer look at the quarterly changes in asking home prices reveals a downward trend that’s much less volatile than the monthly changes suggest. Quarter-over-quarter (Q-o-Q), asking home prices rose 3.1 percent in August, down from 3.2 percent in July and 4.0 percent in April. And this downward slope will likely continue as mortgage rates rise, inventory expands, and investor interest declines.
          August 2013 Trulia Price Monitor Summary        

% change inasking prices

# of 100 largestmetros with asking-price increases

% change in askingprices, excludingforeclosures
Month-over-month,seasonally adjusted   1.2%   Not reported   0.8%
Quarter-over-quarter,seasonally adjusted   3.1%   96   3.6%
Year-over-year   11.0%   98   11.3%
NOTE: Monthly change is August versus July. Quarterly and yearly changes are three-month averages. Data from previous months are revised each month, so data being reported now for previous months might differ from previously reported data.

Despite Recent Price Gains, Construction Lags in Las Vegas and Sacramento

A full housing recovery requires rebounds in both prices and new construction. Rebounding prices normalize the housing market by lifting homeowners back above water and encouraging them to sell. Meanwhile, construction activity signals that a housing market is no longer flooded with empty homes. Despite the fact asking home prices are up 11.0 percent Y-o-Y, construction activity still isn’t back to its normal level yet: construction permits in 2013 are around just 60-70 percent the average levels seen between 1990 and 2012. Among housing markets where asking home prices rose more than 20 percent Y-o-Y, construction was less than half the normal level in Las Vegas, Sacramento, Riverside-San Bernardino, Warren-Troy-Farmington Hills, and Detroit. Only Orange County and San Jose were at or above normal construction levels.
Where Asking Home Prices Rose Most
U.S. Metro  

Y-o-Y % change in AskingHome Price, August 2013

Construction permits, 2013 year-to-date, relative to local long-term normal

Las Vegas, NV
  33.6%   39%

Sacramento, CA
  31.9%   38%

Oakland, CA
  29.3%   60%

Riverside-San Bernardino, CA
  25.4%   46%

Orange County, CA
  23.8%   125%

Phoenix, AZ
  22.7%   53%

Warren-Troy-Farmington Hills, MI
  22.5%   46%

Los Angeles, CA
  22.3%   93%

Detroit, MI
  22.2%   33%

San Jose, CA
  20.3%   135%
Note: Construction permits based on Census data. Not all local areas report monthly permit data to the Census. Bakersfield was removed so that only metros with permitting data were included on this list.

Apartment Rents Rising Faster Than Single-Family Home Rents

Rents rose 3.5 percent Y-o-Y nationally, jumping 3.9 percent on apartment units and only 1.6 percent on single-family homes. Among the 25 largest U.S. rental markets, rents increased the most in Seattle, Portland, and Miami, while declining slightly in Philadelphia, Washington, and Sacramento. Looking at single-family homes only, rents fell Y-o-Y in 6 of the 25 largest rental markets, including investor favorites such as Las Vegas, Phoenix, and Atlanta.
  Where Rents Rose Most (Y-o-Y % Change)
#     U.S. Metro     All Rental Units     Apartments Only     Single-Family Homes Only

Seattle, WA
    9.8%     10.5%     2.0%

Portland, OR-WA
    8.2%     9.1%     5.2%

Miami, FL
    7.0%     7.7%     4.0%

Houston, TX
    6.7%     6.6%     7.4%

San Francisco, CA
    6.5%     7.2%     1.8%
NOTE: Among 25 largest rental markets.

  • “The rate spike since early May has raised the cost of a mortgage by more than 10 percent, but rising rates aren’t the whole story behind the price slowdown,” said Jed Kolko, Trulia’s Chief Economist. “Expanding inventory and declining investor interest have helped cool prices, too. At the same time, mortgage credit has finally started to expand, and the economy continues to strengthen – both of which boost housing demand and offset some of the dampening effect of rising rates.”
  • “Investors and builders have bet on different local markets,” said Jed Kolko, Trulia’s Chief Economist. “Investors have bought in the boom-and-bust metros, helping push prices up more than 20 percent year-over-year in Las Vegas, Sacramento, and Detroit. Builders, however, are betting on markets that avoided the worst of the crash, like Boston, much of Texas, and the expensive California coast, where job growth is strong and few homes are vacant.”

  • To read the full report, see here.
  • To see a graph of price changes from August 2012 to August 2013, see here.
  • To download a list of the price and rent changes for the largest metros, see here.


To view the full methodology and 2013 release schedule, see  here. The next release of the Trulia Price Monitor and the Trulia Rent Monitor will be Thursday, October 3, at 10 AM ET.


Trulia (NYSE: TRLA) gives home buyers, sellers, owners, and renters the inside scoop  on properties, places, and real estate professionals. Trulia has unique info on the areas people want to live that can't be found anywhere else: users can learn about agents, neighborhoods, schools,  crime, commute times, and even ask the  local community questions. Real estate professionals use Trulia to connect with millions of transaction-ready buyers and sellers each month via our hyperlocal advertising services, social recommendations, and top-rated  mobile real estate apps. Trulia is headquartered in downtown San Francisco. Trulia is a registered trademark of Trulia, Inc.

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