October home prices rise 2.9% as rents soar above 5%
The impact of potential buyers unable to obtain mortgages is exemplified by climbing rents, especially in markets like Houston and Miami, where rents rose 16.5% and 10%, respectively.
Home prices rose 2.9% over last year in October, but had nothing on the rental market which saw rates rise 5.1% from 2011 levels, Trulia said Monday.
The numbers show a national real estate market that is experiencing gradual price appreciation. Yet, the impact of potential buyers unable to obtain mortgages is exemplified by climbing rental rents, especially in markets like Houston and Miami, where rents rose 16.5% and 10%, respectively.
The online real estate site released this data from its Trulia Price Monitor and Trulia Rent Monitor for the month of October.
Prices from September to October edged up 0.7%, according to real estate listing data within Trulia’s website.
When removing distressed assets from the equation, home listing prices grew 3.6% from October 2011 to last month.
Phoenix continued to be the turnaround market, with home listing prices up 24.9% from a year ago. In addition, Cape Coral-Fort Myers, Fla., and San Jose, Calif., saw their prices rise 15.7% and 12.7%, respectively.
Phoenix is one of the so-called Sand States that faced a run-up in prices and a dramatic surge in new home construction before the market bust in 2008. While those factors pushed prices down after 2008, the market is experiencing a turnaround  as investors snatch up Phoenix area properties with hopes of turning them into rentals. While investors drove sales for much of the year, a study from Arizona State University recently warned that investors are losing interest  in the market.
As for what gives one particular market strong price and rental rate growth, Trulia credits the expectation of fewer foreclosures, strong job growth and falling vacancy levels.