When adjusted for square footage of properties, home prices increased at one of slowest rates in a decade between May and June of this year, according to data released Thursday — buttressing analysts' warnings that home prices in many key real estate markets could resume a downward slide later this year, after stabilizing late last year.

According to Radar Logic, the firm's June RPX composite price index, which measures per-square-foot home pricing trends in 25 metropolitan statistical areas, is showing fresh signs of housing weakness. Over half of the MSAs tracked by the company posted month-over-month price declines during June, compared to just two markets last year. On a year-over-year basis, only seven MSAs posted price gains during June.

The 25-MSA RPX Composite price for June 24 was $197.09 per square foot, just $1.09 (0.6%) higher than a month earlier and flat year-over-year. This was the second-worst performance for the month of June since the beginning of Radar Logic’s data. The average May-to-June increase over the last ten years has been $2.75 (1.4%), the firm said.

"In a sign of weakness to come, the RPX composite price for the Western region hit its peak for the year in May and declined sharply in June," the firm's report said. "The Western region has been the source of much of the recent strength in the 25-MSA RPX Composite, outperforming the other regions year-to-date and year-over-year on a composite-price basis. The end of seasonal price gains in the West suggests that the 25-MSA RPX Composite will soon start to decline as well."

Fading strength

Even those few markets still holding onto annual gains aren't likely to be healthy, Radar Logic said. San Jose, San Diego, and San Francisco — the three most-improved markets year-over-year — saw a fundamental shift in the mix of sales away from relatively low-priced distressed sales and toward relatively high-priced non-distressed sales, rather than an improvement in the value of most homes.

"The broader issue is that in early spring we began to see trends of an overwhelming supply, both shadow and actual inventory," said Michael Feder, CEO of Radar Logic. "It has now grown from being a simple supply issue to a psychological issue on the buy side. Buyers are going to want bigger discounts."

Feder said that borrowers are now faced with growing negative equity and a herd-like mentality where strategic default may take hold of entire neighborhoods. Simply put, people have no interest in being first or second-time homebuyers, he said in an interview with HousingWire.

Sales volume tanks

Beyond emerging price weakness, sales volume also took declining activity in most major markets during June. Transaction counts among the MSAs measured via the RPX declined 7.3% in June relative to May, the single largest monthly decline ever observed for June since the beginning of Radar Logic’s historical data in January 2000. In comparison, sales activity increased from May to June in all 25 MSAs in both 2008 and 2009.

Twenty-one of the 25 metropolitan areas tracked by Radar Logic saw transaction activity decline between May and June. This is more declining MSAs than in any other year since 2000, the firm said. The largest monthly transaction count declines in June 2010 were in Jacksonville, St. Louis and Cleveland. The two major exceptions were Philadelphia and New York.

Radar Logic expects a decline in sales activity and prices through the end of the year, it said. Analysts at the firm also projected that the upcoming Standard & Poor's/Case-Shiller home price index for Q2 of 2010 will show a gain, although forward prices might really be falling, citing methodological differences between the RPX and Case-Shiller indices.

The Case-Shiller data is scheduled to be released next Tuesday.

– Paul Jackson contributed to this report.

Write to Jacob Gaffney.

The percentage of Canadian homebuyers in Maricopa County, which includes Phoenix, has been climbing since 2007 and now accounts for a larger sales volume than California, according to John Burns Real Estate Consulting.

Canadians purchased 4.2% of all homes sold in the area in June while Californians accounted for 4.1% of total homebuyers during the month. Canadians previously accounted for as low as 0.2% of sales volume for the area, the firm said, citing data from The Information Market.

The strong Canadian dollar and increasingly affordable Phoenix market have increased demand from Canadians looking for second homes and seasonal properties, with many buyers paying in all cash, according to the Irvine, Calif.-based company.

The Canadian dollar peaked against the US dollar in July 2007, and housing prices around Phoenix are down 51% from 2006 highs, the consulting firm said.

Write to Jason Philyaw.