The prices of properties listed for sale increased in 15 of 26 major housing markets during June, suggesting that sellers were at least becoming more optimistic last month despite still-growing inventory levels in most markets. According to Altos Research LLC and Real IQ, which jointly release the Real-Time Housing Market Report each month, a 10-city composite housing price index showed a decline in asking prices of just 0.5 percent in June and 0.8 percent for the past three months.
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The Altos/Real IQ report is among the first pricing studies released each month, and offers market participants a very early look into month-ago pricing trends; the report is issued each month with only a one-week lag from the previous month. Asking prices fell at the fastest rate in Las Vegas for the third consecutive month -- down 3.6 percent during June alone, according to the report -- and 7.2 percent over the most recent three-month period. Listing prices rose at the fastest rate in Denver, up 2.6 percent in June and 6.4 percent during the most recent three-month period. "While the Composite Index continues to show price declines, the rate of decline has slowed recently and more than half of the markets we track are showing sequential asking price increases over the past three months," said Stephen Bedikian, partner and research director for Real IQ. "Housing markets are local, and this downturn remains largely confined to specific geographic areas of the country with four states in particularly bad shape: California, Florida, Nevada and Arizona." Rising inventory a growing threat While asking prices are showing surprising bounce, it remains to be seen if the jump is more than just seller optimism. Despite the increase in asking prices, listed property inventories increased substantially during June -- with the 10-City Composite markets showing an increase of 5.7 percent during the past three months, and 1.9 percent in June alone. Inventory rose in 17 of 26 markets, according to the report, with the largest jumps in Los Angeles and San Diego, up 8.7 percent and 6.1% percent respectively in June. In other words, it remains to be seen if the jump in asking prices can hold up in the face of such substantial inventory increases. "Inventory continues to increase, which is typical during the seasonally strong spring and summer seasons," said Michael Simonsen, CEO and co-founder of Altos Research. "The real test will come in the fall when the market experiences seasonal weakness. If inventory, especially foreclosure listings, piles up too quickly, prices may start declining broadly again." For the ten cities in the composite index, average days-on-market during June was 109 -- a slight increase from 106 recorded in May. Eleven of 26 markets had an average days-on-market of over 100, as well. But by far, the market with the slowest rate of inventory was Miami at an average of 154 days-on-market; Austin, as has been the case throughout most of the housing mess, led all markets with the fastest rate of inventory turnover at an average of 72 days-on-market. For more information, visit http://www.altosresearch.com and http://www.realiq.com.