Radar Logic: Stable home prices in October not market trend
Home prices remained virtually unchanged in October of last year, increasing just 0.1% from the month prior on the RPX Composite price index released by Radar Logic Thursday. However, the firm said the monthly data does not signify a substantial stabilization across the market. The composite index increased slightly after dropping 2.7% in September. Compared to October of 2009, home prices were down 2.3%. Director of Research at the real estate analytics firm Quinn Eddins said home prices tend to flatten out during the month of October. The RPX composite fluctuated less than 1% in every October since the firm started tracking in 2000, with the exception of 2007 and 2008. "The absence of volatility in home prices during October should not be interpreted as a sign of stability to come," Eddins said. "Even if job creation bolsters housing demand in the 2011, I anticipate that demand will fall short of the burgeoning supply homes for sale, and prices will fall further by the end of the year." Home sales in the 25 MSAs tracked in October's study increased 0.4%, marking what Radar Logic calls an uncharacteristic trend for the month. The firm attributed the increase to a "pull through" effect of the homebuyer tax credit. Radar Logic tracks data from 25 of the largest metropolitan statistical areas in the country on a monthly basis. The study is based on the premise that each of the MSAs, while having economic influences in common like credit and mortgage rates, is influenced primarily by local conditions. Write to Christine Ricciardi. Follow her on Twitter @HWnewbieCR.