CoreLogic, the Irvine, California based corporation providing financial, property and consumer information, analytics and business intelligence reports that home prices increased from April at 1.2% and overall yearly price increase from May 2016 to May 2017 at 6.6%. This is according to CoreLogic HPI which is a methodology using public records, servicing and securities real-estate databases and incorporates more than 40 years of repeat-sales transactions for analyzing home price trends.
According to CoreLogic HPI Forecast home prices will increase by 5.3 percent on a year-over-year basis from May 2017 to May 2018, and on a month-over-month basis home prices are expected to increase by 0.9 percent from May 2017 to June 2017. HPI Forecast uses advanced variables and HPI to determine future figures.
Dr. Frank Nothaft, chief economist for CoreLogic states “The market remained robust with home sales and prices continuing to increase steadily in May. While the market is consistently generating home price growth, sales activity is being hindered by a lack of inventory across many markets. This tight inventory is also impacting the rental market where overall single-family rent inflation was 3.1 percent on a year-over-year basis in May of this year compared with May of last year. Rents in the affordable single-family rental segment (defined as properties with rents less than 75 percent of the regional median rent) increased 4.7 percent over the same time, well above the pace of overall inflation.”
Frank Martell, president and CEO of CoreLogic says “For current homeowners, the strong run-up in prices has boosted home equity and, in some cases, spending. For renters and potential first-time homebuyers, it is not such a pretty picture. With price appreciation and rental inflation outstripping income growth, affordability is destined to become a bigger issue in most markets.”
Mr. Martell’s statement is an issue that property management companies must address to compete in the environment. Although New York City properties may begin to appreciate, potential tenants are still wary of the increase in rental pricing and are hesitant to enter into agreements. Successful property management personnel should still perform due diligence to determine what the market bears and how to attract the best tenants for their available units.