Home Prices Show Mixed Picture
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- Peter King | January 26, 2010
Seasonally adjusted U.S. home prices posted a small increase in November, despite signs of weakness in several areas that present a mixed picture of the overall housing market.
Home prices in the Standard & Poor’s/Case-Shiller index of 20 major metropolitan areas, released today, posted a seasonally adjusted increase of 0.2 percent in November, their sixth consecutive monthly increase. November is typically a weak season for home sales and actual prices declined by 0.2 percent.
Annual trends continue to improve
Long-term pricing trends continued to show improvement, with the annual rate of change shrinking to a 5.3 percent decline compared to November 2008, compared to a 7.3 percent annual rate of decline in October. The annual rate of decline has been steadily improving over the past 10 months after bottoming out around 19 percent in February 2009.
“While we continue to see broad improvement in home prices as measured by the annual rate, the latest data show a far more mixed picture when you look at other details.” said David Blitzer, chair of the Index Committee at Standard & Poor’s. He went on to add, “On balance, while these data do show that home prices are far more stable than they were a year ago, there is no clear sign of a sustained, broad-based recovery.”
Housing index prices in four of the 20 major U.S. markets - Charlotte, Las Vegas, Seattle and Tampa – dropped to new four-year lows, wiping out any gains registered over the past year. On the other hand, 14 of the 20 posted increased prices in November, with four areas particularly hard-hit by the collapse of the housing bubble - Los Angeles, Phoenix, San Diego and San Francisco – posting price increases for at least six consecutive months.
December drop in home sales
Still, the direction of the housing market remains unclear, as illustrated by yesterday’s report by the National Association of Realtors (NAR) showing a sharp drop in housing sales in December. The NAR reported that sales of existing homes fell a seasonally adjusted 16.9 percent that month, the biggest monthly decline since the group began keeping records over 40 years ago.
NAR representatives attributed the sharp drop to buyers wrapping up home sales in November in anticipation of the scheduled end of the first-time homebuyer tax credit, which has now been extended through April 30.
Despite the decline, home sales for December 2009 were up 15 percent from their rate one year before in December 2008. Overall, existing home sales were up 4.9 percent for 2009, at 5,156,000 units, up from 4,913,000 transactions in 2008. It was the first annual sales gain the NAR has reported since 2005.
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