CLEVELAND, Ohio -- House-price gains picked up in December, highlighting concerns about supply shortages and affordability woes for buyers heading into 2017.
Price growth accelerated in Cleveland and across the nation at the end of last year, according to a closely watched set of indices updated Tuesday.
An index tied to prices of single-family homes in the Cleveland-Elyria-Mentor area was up 4.4 percent in December from a year before. That's the highest rate of local price growth since November 2013, based on the S&P CoreLogic Case-Shiller Home Price Indices.
A national index ended the year up 5.8 percent from December 2016, achieving its highest annual growth rate since June 2014.
What does that mean?
David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, isn't alarmed by the speed of price increases. Accounting for inflation, U.S. home prices are rising at a 3.8 percent annual rate, he said. That's certainly higher than average, but it's not out-of-line with 40-plus years of housing trends.
But, he acknowledged, "questions about whether this is a normal housing market or if prices could be heading for a fall are natural."
In a written statement, Blitzer pointed to long-running concerns about the limited supply of available properties. Nationwide, the market is tipped in favor of sellers, with roughly 3.6 months worth of homes listed for sale in January. And new home sales still haven't returned to their pre-recession levels.
"The spring housing market is shaping up to be another doozy for homebuyers," Ralph McLaughlin, chief economist for the Trulia real estate website, wrote in an email. "Housing affordability is the key to helping break yet another year of gridlocked inventory, but all signs are showing that homes this spring will be much less affordable than last year."
The Case-Shiller report doesn't include actual prices. The indices, based on repeat sales of single-family homes, offer a broad idea of how the market is moving.
Prices in the Cleveland area still haven't fully recovered from the housing collapse. Compared with its mid-2006 peak, the Cleveland index was down 8.12 percent in January. Nationally, prices only recently crept back above their pre-recession high.
Cleveland remains one of the slowest growth markets among 20 major cities in the Case-Shiller report. Only New York and Washington, D.C., posted slimmer annual gains in December. Seattle and Portland led the pack, with annual jumps of 10.8 percent and 10 percent, respectively.
Svenja Gudell, chief economist for real estate data company Zillow, expects larger, pricier markets to become increasingly inaccessible to buyers as mortgage rates rise.
"in particular," she said in an emailed statement, "we expect coastal markets to show slowing price appreciation first, while the country's more affordable, often inland and somewhat smaller markets - places like Nashville, Milwaukee and Louisville - will continue to see strong price appreciation."
In January, the average sale price for a house in Northeast Ohio was $140,765, up 5.6 percent from a year before across an 18-county footprint. The average sale price for a condominium was $125,711, according to the Northern Ohio Regional Multiple Listing Service.
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