Home Prices Drop Slightly in July

U.S. housing prices fell slightly in July, reversing four months of modest gains, according to the latest IAS360 survey of major housing markets.

Home prices declined 0.5 percent in July, according to the survey, which was released today by the foreclosure management company Intergrated Management Services. The monthly survey is considered one of the leading indicators of U.S. housing trends.

It's the first decline in the IAS360 index since February, following a gain of 2.7 percent in the second quarter of the year. Overall, prices are down approximately one-half of a percent since the first of the year.

"We are seeing normal seasonality with a slight July pullback, but we are not out of the weeds yet as we will see waves of volatility while the markets correct themselves and settle down," said Dave McCarthy, President and CEO of Integrated Asset Services. "Meanwhile, there's an awful lot going on down at the neighborhood level that will take time to normalize at the top."

Overall U.S. home prices are down 16.2 percent from the index's peak in June 2007.

Biggest declines posted in the West

The West posted the biggest overall declines of the four major U.S. regions, with prices down 1.2 percent for the month. Prices in the Las Vegas metropolitan region dropped 4.8 percent in July, its biggest monthly decline since prices began falling in August 2006.

Denver and San Francisco also posted big drops, each declining 3.8 percent. The drops were a significant reversal for the Bay area, where prices had gained 8 percent from the first of the year, while Denver prices had remained relatively stable the previous six months.

Meanwhile, prices in the Midwest were up 0.2 percent, while dropping 0.2 percent in the South and 0.6 percent in the Northeast.

Slight gain for Miami

Prices were down in six of the 10 major metropolitan areas the survey tracks. Gains were posted by two metropolitan areas that have been hit particularly hard by the housing crisis, with Miami housing prices u 0.5 percent in July and San Diego posting a 1.3 percent increase. Prices in those areas remain down 15.3 percent and 10.9 percent from their July 2008 levels, respectively.

"A lot of this volatility has to reflect Washington's near-term influence on price behavior through actions like the foreclosure moratorium," said McCarthy. "We're already seeing buying activity moving around in different price segments."

The IAS360 index tracks changes in monthly median housing prices across the U.S., using data obtained from 15,000 neighborhoods in 10 major metropolitan areas. Areas included in the survey are the metropolitan regions of Boston, Mass.; Chicago, Ill.; Denver, Colo.; Las Vegas, Nev.; Los Angeles, Calif.; Miami, Fla.; New York, N.Y.; San Diego, Calif.; San Francisco, Calif.; and Washington, D.C.