The number of markets on the NAHB/First American Improving Markets Index fell to 247 as 3 were added and 11 dropped from the July level of 255. Most of the markets that fell off had very small price increases that qualified them to be on the list and the latest price indexes slipped back below previous peaks. For instance, Virginia Beach was on the list in July with a 0.7% increase in house prices since January 2012. The average price increase in July for the markets that did fall off the list was 0.5% while the markets on the August list have an average price increase of 7.4%.
The small drop in the August list is similar to the stall in the index in 2012 as the not seasonally-adjusted winter and early spring house price data soften when those markets with small increases see price indexes slip down below the previous peak. Last year, the seasonally price effect lasted through August.
Every state contains counties of a metro area on the list with California at 24 metros, Texas at 19 metros and Florida at 18 metros. As evidence of the dynamic nature of the IMI, two of the three new entrants in August have been on the list before. Kankakee Illinois was on the list from October 2011 to January 2012 and in June 2013. Since the underlying data is revised, metros can come back sooner than the 6 month requirement for an increase. Ocean City New Jersey reentered the list in August after having been on the list from February 2012 to May 2012. Atlantic City New Jersey is on the list for the first time.