More Buyers Take Up Asking Price of Residential Properties, Rents Cool Down

In a yet another housing recovery milestone, in August, the asking price of houses rose 2.3 percent from last year; a rise was recorded in 68 of 100 largest metros.

This means that home sellers are having good times with buyers coming in droves. In fact, the waiting period of selling has decreased to 69 days from 98 days.

The asking price excluding foreclosures was even higher at 3.8 percent.

Analyzing the Trulia Price Monitor and the Trulia Rent Monitor, the real estate listing website reported that this year-over-year is the largest increase since before recession. The month-over-month increase was 0.8 percent – the seventh consecutive monthly increase.

“Asking prices rose 2.3 percent year over year in August, hitting two housing recovery milestones,” Jed Kolko, Trulia’s chief economist, said in a statement. “First, asking prices rose faster than at any time since the recession. Second, asking prices excluding foreclosures are now rising faster than wages, putting an end to many years of affordability gains.”

According to the report, the biggest increase was recorded in the markets of Phoenix, Florida, Warren-Troy-Farmington Hills MI, Denver and San Jose. Southwest metros of Tucson and Las Vegas, where year-over-year prices were dropping three months ago, saw the biggest improvement.

Rate of rent increase drops
Meanwhile, the report showed that the rents increased nationally at 4.7 percent from last year, making it the smallest year-over-year increase since March. However, this slowing rent increase coupled with price gains is expected to influence renters in staying in rentals than buying a house, Kolko said.

According to the report, low rate of rental increase is primarily due to the availability of new units in the market.

“Rents had been on fire earlier this year, but some of the hottest rental markets are starting to cool,” Kolko said. “New construction that started last year is finally coming onto the market, giving renters more choices and some relief from rising rents. Still, rents are climbing in nearly all of the major rental markets.”

With a 10 percent year-over-year increase in August, high rentals were recorded in Houston and Seattle, the report said.