Housing Prices End Two-Year Skid, says IHS Global Insight
The two-year slide in US housing prices ended in Q309 and increased 0.2% over the previous quarter, according to a quarterly report form IHS Global Insight, a provider of economic and financial analysis. Although prices increased on a national average, 161 of the top 330 metropolitan areas had declines in prices, but it’s still an improvement from Q408 when prices dropped in 317 metro areas. For the first time since the study began in 2005, no metro areas were “extremely overvalued.” However, the firm warns against extrapolating the results of the report into wider trends: “While the rate of decline has decreased throughout the year as the market began to stabilize, it's not at all clear that the market is on a recovery path,” said James Diffley, group managing director of IHS Global Insight’s regional services group. The increase is the first since Q207 when the slide began, but prices remain 10.7% below the peak that same year. The Federal Housing Finance Agency’s (FHFA) monthly house price index also showed improvement as prices increased 0.6% on a seasonally adjusted basis from September to October. The largest declines from the previous quarter came from Bend, Oregon’s 5.6% drop, and Las Vegas’ 5% depreciation. Both metros are 33.5% and 56% below their peaks in 2006, respectively. Of the 330 metro areas studied, eight dropped below 50% of their peaks. Merced, Calif. is 66% below its highest point. Since the cycle began, only 16 MSAs have avoided a net home pricing decline. Six are in Texas, and all but Pittsburgh are in the center of the country. Write to Jon Prior.