A Needle in a Haystack: Where’s the Good News on Housing?

There is plenty of bad news on housing, at least transactionally, right now — prices are down, sales volume is down, inventories remain far too high. And that shouldn’t be surprising, given that we’re in the middle of one of the worst downcycles for real estate in our nation’s history.

A report released yesterday by real estate analytics firm RadarLogic highlighted continued problems for housing in January: out of 25 major MSAs studied, only two — Charlotte, NC and New York — remained in positive pricing territory on a yearly comparison basis.

RadarLogic publishes a set of housing prices, on a per-square-foot basis, that serve to drive the Residential Property Index, or RPX; the RPX is one of the tradeable property derivatives out there (the other being the Case-Shiller based housing futures).

Some markets, according to the RadarLogic data, are just seeing prices get hammered. Sacramento, for example, is off -27.8 percent year-over-year; Las Vegas, down 25.4 percent yearly; and San Diego, off 21.2 percent. Those kind of numbers put even prudent borrowers upside down on their mortgages.

The study does find what it calls some “potentially positive influences” worth paying attention to. The first is that monthly price declines did moderate during January, relative to December. Twelve of 25 MSAs tracked saw the rate of price declines either slow or reverse during the month, including Miami and Chicago; five MSAs saw monthly price declines accelerate, including Detroit, which posted a 6.4 percent drop in housing price per square foot during January alone.

The picture is decidedly less positive, however, when you compare annual price changes in December and January on a rolling twelve-month basis; which is to say that a moderation in monthly price declines wasn’t enough to offset poor performance over the course of the past year. Only six MSAs saw the annual rate of price declines improve in January, while fourteen MSAs actually saw their annual price change rates worsen.

RadarLogic suggested that the spring selling season will likely provide a better picture of where the markets are headed in the months ahead.

For more information, visit http://www.radarlogic.com.