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REAL ESTATE: Index shows home prices gain at twice rate of inflation

REAL ESTATE: Index shows home prices gain at twice rate of inflation

The Standard & Poor’s Case-Shiller home price index, a leading measure for the nation, says home prices increased 4.6 percent year-over-year in December.

That’s more than twice the rate of inflation for 2014. The average rate of inflation was 1.6 percent, according to the Bureau of Labor Statistics.

Existing home prices and sales are close to normal, but S&P Dow Jones Indices chair David Blitzer said new home sales and construction activity remains weak. “The housing recovery is faltering,” he said in a Tuesday, Feb. 24 statement.

Housing starts are trending at an annual rate of 1 million, a pace Blitzer said once reflected an economy in recession. The softness is occurring despite strong job growth, declining unemployment, low interest rates and positive consumer confidence, he said.

Clear regional patterns also emerged on home prices, and major metro areas along the West Coast are ahead of the pack.

San Francisco led the nation with year-over-year price gains of 9.3 percent, and Los Angeles home prices were up 5.5 percent from December 2013, the Case-Shiller report said. Phoenix was the only exception in the West, with home prices rising there by only 2.4 percent. Meanwhile, major cities in the Midwest and in the Northeast measured gains of less than 2 percent.

The report does not track prices in the Inland region, but the CoreLogic DataQuick report on real estate sales for new and existing homes and condos in December found stronger price gains in the two-county Inland region than in San Francisco.

Home prices in Riverside County rose 7.1 percent to $ 300,000 from December 2013. And new and median home sale prices rose 9.9 percent in San Bernardino County from the year earlier, the DataQuick report said.

The 3,466 home sales in Riverside County were up 13 percent from December 2013. The 2,333 sales in San Bernardino County were up 8.3 percent from the year earlier.

Contact the writer: 951-368-9423 or dgruszecki@pe.com

Press Enterprise : Real Estate