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Unchanged Home Prices Raises Questions

The Data & Analytics division of Black Knight Financial Services (BKFS) reported no monthly change in its Home Price Index (HPI) for January, underlining the question as to where other home price reports—including the monthly Case-Shiller Home Price Indices—will land for the year's first month.

BKFS' latest report shows the index registering $232,000 in January, unchanged from the end of 2013. Year-on-year, the index was up 8 percent from $215,000.

"Prices have flattened out due to seasonal effects and a slowing in the market," said Raj Dosaj, VP of behavioral models and HPI for Black Knight Data & Analytics.

Given January’s flatness, national prices remain 14 percent off their peak of $270,000 in June 2006.

Of the 20 largest states, California posted the biggest year-over-year increase at 14.8 percent. On a monthly basis, it ranked among the top five largest states, reporting a gain of 0.3 percent.

Among all states, New York topped in gains with a 0.6 percent monthly increase. Following the Empire State were New Jersey (0.5 percent) and Nevada, Pennsylvania, Georgia, and the District of Columbia—all at 0.4 percent.

Not making the top 10 list in January was Texas, which, after several months spent climbing to new price peaks, backed off a bit with a 0.3 percent month-over-month decline.

Among metros, half of the top 10 performers in January can be found in California—not a surprise, given the state’s representation in past HPI reports. Top movers included San Jose (0.9 percent), Santa Rosa (0.8 percent), and Oxnard (0.7 percent), California, which took up the top three spots. Also reporting gains were New York City and San Francisco, each at 0.7 percent.

As for this week's other indices, Dosaj expects to see flat to dropping prices, "as they tend to be impacted by seasonal effects more strongly than the Black Knight HPI," as they include short and REO sales that are more prone to seasonal volatility.

"Going forward we should see positive growth in 2014 but at a more moderate pace compared to 2013.  Somewhere between 2-4 percent for the year is likely," he said.


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