· posted by MARILYN KALFUS Orange County Register
The region’s housing market saw the third-biggest home price increase among 20 leading U.S. metro areas in the S&P Case-Shiller Home Price Index.
Home prices in the Los Angeles-Orange County area jumped 20.3 percent in December compared with a year earlier, the 18th consecutive month of annual gains, housing figures released Tuesday show.
The Los Angeles-Orange County housing markets saw the third-biggest home price increase among the 20 leading U.S. metro areas in the latest S&P Case-Shiller Home Price Index.
But the region’s home prices were flat from November to December, the first time there was no month-over-month increase since February 2012.
Nationally, the index ended its best year since 2005 – closing the year up 11.3 percent. But the future is shaping up differently.
“The strongest part of the recovery in home values may be over,” said David M. Blitzer, chairman of the index committee at S&P Dow Jones Indices.
Recent economic reports suggest a “bleaker picture,” the report stated. Existing home sales fell 5.1 percent from December to January, the slowest pace in more than a year. Permits for new residential construction also were down. The report alluded to cold weather in much of the nation, but noted that higher prices and mortgage rates are having an impact on affordability.
“Mortgage default rates … are back to their pre-crisis levels but bank lending standards remain strict,” the report said.
Las Vegas, San Francisco and Los Angeles-Orange County were the top three performing metro areas of 2013 with gains of over 20 percent, according to the index. But all three places showed lower annual rates in December than November.
The Los Angeles-Orange County market has seen six months of consecutive year-over-year gains of more than 20 percent, capped by post-recession high of 22.1 percent in October.
The index, created by economists Karl E. Case and Robert J. Shiller, is considered one of the most reliable analyses of home values.
The index compares the latest sales of detached houses with previous sales, and accounts for factors such as remodeling.
But the index lags behind more recent data showing a weakening market.
Zillow chief economist Stan Humphries said the spring homebuying season is expected to be less frenzied than last year, when the housing supply was extremely tight and investors often outbid regular buyers.
“Looking further ahead,” Humphries said, “the market should continue its slow march back to normal, as annual appreciation rates fall to more sustainable levels around 3 percent, mortgage interest rates climb to levels closer to historic norms and negative equity continues to recede.”
Staff writer Jeff Collins contributed to this report.