Seasonal Strength in Home Prices
Following a free fall in much of 2008, the value of many households' largest asset -- their home -- seems to show signs of stabilization so far in 2009. A composite index of 25 major metropolitan areas across the US showed a 0.3% slide from February to March, adding to the composite measurement's Q109 stability, according to a monthly housing report released today by Radar Logic. “While not a bottom, the stability in home prices we are seeing is certainly good news,” says Radar Logic CEO Michael Feder in a media statement today. House prices improved in 11 of the 25 major metropolitan areas studied for the report. Six of the remaining areas showed declines less severe than those seen in the previous month. The Boston market showed the strongest month-over-month gain (6%) in house price per square foot -- the measurement used by Radar Logic to remove the factor of house size and to show house prices in real terms. Denver followed closely with a 5.7% increase since February, while Milwaukee house prices rose 5.6% and Charlotte posted a 5.1% increase. The Washington, DC market fell the farthest in terms of price per square foot, dipping 7.5% below February's levels. The only other area to come close, Las Vegas, fell 4.3% from the previous month, while the other 12 areas that showed declines only fell less than 2% from last month. Sales counts rose in 23 of the markets since February, in line with historic seasonal patterns for the month, Radar Logic found. The findings also correspond to increases in so-called "motivated" sales -- a kinder term than "foreclosure" sales -- across 23 local markets on a year-over-year basis during the month, and in 21 areas on a month-over-month basis. The increases correlate with expiring foreclosure freezes and moratoriums that dragged down foreclosure sales in previous months, Radar Logic's analysts say in the report. Foreclosure sales, which historically bring 20% less than non-foreclosures, pull down house prices in hard-hit areas. An influx in foreclosure sales following the expiration of many moratoriums might have a negative impact on house prices in future reports, making the stability seen in the first quarter a seasonal anomaly. And with online foreclosure marketplace RealtyTrac reporting foreclosure filings up 32% in April from the same time last year, it's unclear how much longer housing markets across the US have to unwind. Write to Diana Golobay.