Asking Prices Resume Downward Trend; Summer's Glow Gone?
Asking home prices resumed their downward trending in August, portending the end of a likely small seasonal bump in prices, according to a report released Thursday by research firm Altos Research and market analysis specialist Real IQ. The data, an early indicator of actual selling prices, suggests that sellers are again dropping their asking prices after a few months of some markets seeing month-to-month increases. Prices of properties listed for-sale fell in 20 of the 25 major MSAs tracked in the report; a 10-City composite asking price index showed a drop of 1.5 percent in August relative to July's total, and is down 2.3 percent over the past three months. Some analysts have jumped on the monthly price increases in certain local markets as evidence that real estate may be reaching some sort of bottom, or that the worst of the current cycle may be past. Real IQ partner and research director Stephen Bedikian suggested such optimism may be misplaced. "Many markets that had posted multi-month sequential price increases during the summer months displayed fresh weakness in August," said Stephen Bedikian, partner and research director for Real IQ. "This could portend a general resumption of the downward trend in prices as most markets typically experience seasonal weakness in the Fall and Winter months." Asking prices fell at the fastest rate in Las Vegas -- down 4.8 percent during August alone, and 8.6 percent over the most recent three-month period, an annualized price decline of nearly 35 percent. IN comparison, listing prices rose at the fastest rate in Denver -- up 1.9 percent in August -- followed by San Diego, where prices were up 1.4 percent. Click here to see a table of all MSA home price trends in the report. Despite resurgent pricing weakness, the Altos/Real IQ data does show that listed inventory is falling, with properties on the market declining in 21 of 25 markets during August, compared the July. Most economists see a huge overhang of new and existing home inventory as the single most critical factor that will drive recovery in real estate (or, alternatively, hinder it from taking place). Inventory fell by the largest amounts in Seattle and Dallas, with inventory contracting 6.0 percent and 4.8 percent respectively. Many markets showed inventory declines of more than two percent for the past month, as well, including: San Francisco, San Jose, Washington, D.C., San Diego, Phoenix, Charlotte and Houston. Such declines could be a function of unsuccessful sellers taking their homes off of the market last month, or could portend conditions that might stanch at least some of the price declines in key markets. "While seasonal weakness is typical in the fall and winter months, continued widespread inventory reductions like we saw in August could temper near-term price declines," said Michael Simonsen, CEO and co-founder of Altos Research. That said, it's still taking an awful long time to sell what inventory is out there. Altos/Real IQ reported that sixteen of 26 markets had an average days-on-market of 100 or more; days-on-market declined in just three of 26 markets. Miami, one of the hardest-hit local markets throughout the current real estate slump, averaged 160 days-on-market for listed properties in August. Both San Diego and San Francisco, however, experienced the fastest rate of inventory turnover at an average of 84 days-on-market. (Which, notably, means that even in the fastest-selling markets, homes are on the market for nearly three months before selling.) For more information, visit http://www.altosresearch.com and http://www.realiq.com.