February Home Prices, Tale of Two Coasts

U.S. home prices were up 0.7 percent from January to February according to the Home Price Index (HPI) report released by Black Knight Financial Services on Monday.  The HPI was at $242,000 for the month compared to $241,000 in January and was up 4.6 percent from the index level of $232,000 in February 2014. The gain in the HPI was the largest for a month since June 2014. 

There was a strong divergence in price performance on the two coasts.  The largest month-to-month changes among all states were in Washington where the HPI rose 1.8 percent followed by California (+1.5 percent), Oregon (+1.4 percent), Colorado (+1.3 percent), and Hawaii (1.2 percent).  Prices were down by 0.6 percent in Connecticut and 0.5 percent in both New Jersey and Vermont.  Three of the five remaining New England states also topped the list for price declines, Rhode Island, New Hampshire, and Massachusetts, all at -0.2 percent. 

There were some big gains among West Coast metropolitan areas with San Jose up 3.2 percent and San Francisco gaining 2.4 percent.  Seattle had a month-over-month increase of 2.0 percent, Napa and Santa Cruz were up 1.9 and 1.8 percent respectively.  Metros at the other end of the spectrum were again on the other coast - New Haven dropped by 1.3 percent, Atlantic City and Torrington, Connecticut declined 0.9 percent; Worcester, Massachusetts lost 0.8 percent, and Norwich, Connecticut was off 0.7 percent.

The February national HPI was down 9.5 percent from the peak it reached in June 2006 of $268,000.  Three states , Colorado, New York, and Texas established new price peaks for the month as did nine of the 40 largest metropolitan areas, Austin, Dallas, Houston, San Anton, Denver, Honolulu, Nashville, San Jose, and Columbus, Ohio.  Las Vegas remains the furthest off its pre-crisis peak of any of the 40 most populous metropolitan areas, still down almost 41 percent. 

Colorado had the largest year-over-year increase among the 20 most populous states, up 9.4 percent.  Only Connecticut saw an annual decline, its HPI was down 1.4 percent compared to February 2014.