IAS Sees House Prices Gain 1.6% in May
National house prices gained 1.6% in May, the largest month-on-month increase since July 2005, according to an index calculated by default management and residential valuation provider Integrated Asset Services (IAS). House prices are still down 10.5% since last year, but the latest IAS360 House Price Index recorded positive monthly numbers in all four US regions this month. The Northeast is up 3.2% since April, while the Midwest gained 1.9%, the South 1.1% and the West 0.9%. With the South's recovery since posting the only regional decline back in April's report, the data would suggest national home prices may be skipping along some sort of bottom, although IAS warns against too much optimism. "Two months' worth of positive data hardly signals a turn in the national housing market, but we have to be encouraged by what we're seeing in several important counties and neighborhoods," says IAS president and CEO Dave McCarthy in a statement on the report. The IAS360 House Price Index tracks monthly changes in the median sales price of detached single-family residences across the US. The index, calculated from data on "arms-length" transactions, in May found that nine of the 10 largest metropolitan statistical areas (MSAs) posted substantial recoveries from just two months before, according to IAS. Boston and Chicago posted 3.7% and 1.5% respective gains, according to the index, while San Francisco is up 3%, Los Angeles 2.8% and San Diego 1.2% from April. Denver gained 0.4%, but Las Vegas continued to slide, falling 0.9%. The reason for these gains, according to a prominent real estate analytics and consulting firm, may be due to a shift of demand away from foreclosed and distressed properties. "We're seeing a mix shift in home sales and that's manifesting itself as increased pricing," says John Burns, CEO of John Burns Real Estate Consulting. "For a while, the bulk of homes sales were distressed properties in declining neighborhoods... . Sales are shifting back to more traditional submarkets and neighborhoods." Write to Diana Golobay.