US home prices climbed 5% in February from a year ago, despite an incoming wave of REOs that could saddle the market for another three years
, according to the Clear Capital
Home Data Index.
Prices grew on a yearly basis for the first two months of 2010. The 5% uptick in February bested the 2.3% yearly increase in January
. However, prices remained unchanged on a rolling quarterly basis.
“If the increase in demand that preceded the end of the last tax credit is any indication, home prices may dip only slightly into negative territory before getting an added boost before the April tax credit deadline,” said Alex Villacorta, senior statistician at Clear Capital.
Prices in Providence, Rhode Island climbed 6.1% from the previous three months, the highest increase of any metropolitan statistical area (MSA). California had five of the 15 highest performing markets as Los Angeles prices gained 2.2% over the rolling quarter.
In 11 of the top 15 markets REO saturation increased by an average of 1.3%.
“We observed an expected increase in REO saturation this month as the flow of foreclosures continued to come into the market, while traditional non-distressed sales wait to be listed in the spring and summer months,” added Villacorta.
The price gains in the early months of 2010 contrast sharply with 2009, when credit lines were cinched, investments dropped in value and financial institutions facing failure dumped REOs onto the market, according to the report.
Write to Jon Prior