Mozart says that the recent hockey-stick change in the data is merely seasonal, and he expects 7.20% more appreciation in the next 12 months around NSDCC – and he has been right before.
This graph would seem to indicate the same – just the usual malaise we see at the end of every buying season that causes lower prices:
The FHFA Index is out today, and though a bit dated in reflecting August sales which began in June or July, it did show an increase:
Their first quote:
“Because markets are tight, we are still going to see solid price increases through next year,” Patrick Newport, an economist at IHS Global Insight in Lexington, Massachusetts, said in a telephone interview yesterday. “Eventually, the growth rate in prices is going to slow down.”
Which was replaced by this quote an hour later:
Competition for a limited supply of available homes has been fueling price gains across the U.S. The increases will slow as higher values draw more sellers to the market, adding to the inventory, according to Paul Diggle, property economist at Capital Economics Ltd. Prices will rise 8 percent this year and 4 percent in 2014, the firm projected.
“Supply is loosening, and clearly that is why it’s going to be a slowdown,” Diggle said by telephone from London. “A lot of people delayed selling at the bottom of the market. As prices rise more, people are in the position to sell.”
The ivory-tower guys agree about appreciation for now, but slowing. The safe bet for all national pundits will be 4% to 8% appreciation in 2014.
So I might be out on a limb by myself, but I’ll stick with my zero-appreciation for NSDCC in 2014, almost solely due to my expectation of rising inventory. We’ll know if sellers are rushing to market by mid-to-late March.
Frenzy exhaustion is causing buyers to re-calibrate. If the inventory does rise, it will strengthen the buyers’ resolve to not pay more than the last guy.
The frenzy fever has been broken, but buyers still want to buy – it will just be a price thing. What do you think?