April Sales Bump Not Enough to Offset Price Declines: Report
Any effect of the usual spring selling boost appears to require a microscope to see this year in most housing markets, according to data released Monday morning by Radar Logic Inc. The company's price-per-square-foot data for 25 of the nation's largest residential housing markets found that 23 registered year-over-year price declines during April, while only one -- Charlotte, NC -- showed a perceptible jump in prices. April is usually the peak of the spring selling season, Radar Logic said, and while 21 of the MSAs tracked by the data service showed a month-over-month increase in transaction count, that number was below the 24 MSAs registering monthly transaction gains during March. Further, only ten MSAs showed month-over-month growth in price per square foot, compared to 12 markets showing similar growth over the same period last year. In other words: anyone hoping to see a spring selling boost is likely to be pretty disappointed as the rest of 2008 rolls onward. "The housing market continued to suffer as we entered the seasonal spring selling period. Continued difficulty in financing home purchases and lack of confidence are key issues," said Michael Feder, CEO of Radar Logic. Some of the yearly drops in price recorded during April were substantial, with 15 MSAs registering double-digit price declines and six MSAs showing drops of greater than 20 percent. The nation's worst performing MSA according to Radar Logic's pricing data was Sacramento, Calif., which has seen prices fall 31.7 percent on a yearly comparison basis. So-called "motivated sales" -- distressed asset sales -- continued to drive overall pricing and transaction counts in key metropolitan areas, Radar Logic said. Los Angeles, Calif., which saw price per square foot drop 2.1 percent between March and April, was impacted by 29.0 percent of sales representing motivated sales. In Phoenix, which has seen price fall by more than 25 percent in just one year, the motivated sales percentage was 22.2 percent of all transactions in April, Radar Logic said. 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). For more information, visit http://www.radarlogic.com.