Economy Watch: Residential Price Increase Still Slowing

By Dees Stribling, Contributing Editor

Trulia reported on Thursday that asking prices for U.S. residential properties rose 0.8 percent in September, up in 92 of the 100 largest metro markets. Still, the upward pressure on asking prices is decreasing. Year-over-year, asking prices rose 6.4 percent, down from a 10.4 percent year-over-year increase in September 2013.

Asking prices for condos–for-sale homes in multi-unit buildings—rose 7.3 percent year-over-year in September, which is more than the 6 percent increase for single-family homes. Condo prices rose faster than single-family home prices in 18 of the nation’s 20 largest condo markets. Some markets were more robust than others, naturally. Asking prices for condos rose more than 15 percent year-over-year in Miami, Denver, and West Palm Beach.

Earlier this week, CoreLogic reported that during August 2014, home prices nation wide increased by 6.4 percent year-over-year, and by 0.3 percent month-over-month. Excluding distressed sales, home prices increased 5.9 percent from August 2013 and were up 0.3 percent from the prior month; all states except Mississippi experienced an annual rise in prices, with Massachusetts (up 9.4 percent) and Maine (up 9.3 percent) showing the largest increases.

Ten states reached new highs in home prices in August 2014, CoreLogic reported. Despite having the third-fastest state appreciation—9.2 percent year-over-year—Nevada still hasn’t come close to its peak level (the bubble was really big, and it made a really big pop). Nevada housing is still 36.2 percent off peak.

Unemployment claims low, equities dive

For the week ending October 4, initial unemployment claims were 287,000, a decrease of 1,000 from the previous week, according to the U.S. Department of Labor on Thursday. The four-week moving average was 287,750, a decrease of 7,250 from the previous week. That’s is the lowest level for this average since February 4, 2006, when it was 286,500.

Wall Street took a dive on Thursday, with the Dow Jones Industrial Average off 334.97 points, of 1.97 percent. The S&P 500 declined 2.07 percent and the Nasdaq retreated 2.02 percent. A variety of stresses seemed to have touched off the strongest selloff of 2014 thus far, including weaker than expected growth numbers from Germany, uncertainty about what the Fed might do, or maybe just that markets traditionally act a little strange in October.

Some commodities also dropped on Thursday. The benchmark futures West Texas Intermediate for November delivery fell by $1.54 for the second day in a row, ending at $85.77 a barrel, the lowest level since mid-December 2012. Gold, on the other hand, which has also been down lately, rose $19.30 on Thursday, or 1.6 percent, to $1,225.30 a troy ounce on the Comex division of the New York Mercantile Exchange. It was the highest closing price for the yellow metal since September 18.