Prospects in the housing market remain glum as the weaker then expected spring buying season pushes prices and transaction counts down.
In April, home prices deteriorated 5.1% compared the same month of 2010 when the first-time homebuyer tax credit was in place, according to RadarLogic
's RPX Housing Market Report released Thursday. RadarLogic reported price declines in all 25 metropolitan statistical areas that it tracks, with Boston experiencing the largest drop of 21.8% compared to April 2010.
The data tracking firm did note that prices increased 2% between March
and April, a "large gain" compared to years past. And most of the major MSAs under RadarLogic's watch reported price gains on a monthly basis. However, the good news is short lived, as the year-to-date change in home price was negative for only the third time in the last 10 years.
"The decline in the composite price from January to March was so large that the large seasonal bounce in April was not enough to bring the year-to-date change into positive territory," RadarLogic said.
The changes in the RPX composite price index were consistent
with the data released by the Federal Housing Finance Agency
Wednesday, which found a scant 0.8% increase in home price between March and April.
April home sales trended in a similar fashion, falling 9.2% compared to one year prior. Transaction data is slightly skewed, as the 2010 tax credit artificially inflated home sales prior to its expiration in June 2010.
On a monthly basis, home sales increased 11.6% in the 25 MSA tracked by RadarLogic. This is the largest percentage increase for the month of April in the last 10 years, RadarLogic said.
Sales were driven by an increasing number of distressed property sales, which is also dragging down home prices. Foreclosed properties accounted for 30% of all sales in April, according to RadarLogic, down from 33% in March. The average price for a distressed property was 39% lower than a nondistressed property in April.
"Our outlook for housing prices is negative as the major headwinds facing the nation's housing markets — widespread negative equity, a backlogged foreclosure pipeline and persistent oversupply — have not abated," RadarLogic said. "There is simply too much supply to be absorbed by the tenuous, at best, demand."
Write to Christine Ricciardi