Small Increase Reported in Quarterly Home Prices

Quarterly home prices have risen nationwide for the first time since 2006, according to at least one new study, with prices edging up 1.7 percent over the previous quarter.

The survey, released today by real estate valuation company Clear Capital, reports that home prices increased in three of the nation's four regions, led by the Midwest, with particularly strong gains in the Ohio cities of Cleveland, Columbus and Cincinnati.

The monthly Clear Capital Home Data Index Market Report is a new survey product, having just been launched in June, so it has yet to establish a track record by which to gage its reliability. However, the results are not out of line with other recent surveys, including last month's survey of existing home sales by the National Association of Realtors, which showed an upturn in prices in May.

"We are encouraged to see the first quarterly national appreciation in three years," said Clear Channel President Kevin Marshall, in discussing the results. "Foreclosure moratoriums, first time home buyer incentives, and investment activity have contributed to this springtime appreciation of home price trends. While this does not conclusively indicate that the market has bottomed, dramatic price depreciation rates have been curbed so we see a higher degree of confidence in the housing markets."

Strong gains seen in Ohio cities

Housing prices in the Midwest increased by an average of 5.3 percent over the previous quarter, with Ohio leading the pack. The strongest quarterly metropolitan gains in the survey were posted by Cleveland (up 19.6 percent over the previous quarter), Columbus (up 15.6 percent) and Cincinnati (up 12.9 percent). Across the state line, Pittsburgh, Pa. was fourth with quarterly gains of 10.8 percent.

The report attributed Cleveland's gains to season springtime purchase activity combined with strong demand for lower priced homes, where relatively small changes in price can have a noticeable effect on results for the overall market. Lower priced homes accounted for 50 percent of sales in the Cleveland metropolitan region. In addition, the report suggested that a decline in the number of foreclosed homes on the Cleveland market helped boost sales prices as well.

"Sand states" continue to struggle

The biggest declines continued to be in the "sand states" of Nevada, Arizona, Florida and California, led by a 12.4 percent quarterly decline in the Las Vegas, Nev. metropolitan region. The next biggest declines were posted by Orlando, Fla. (down 9.3 percent), Riverside/San Berandino, Calif. (down 8.9), Phoenix, Ariz. (down 7.7) and Los Angeles, Calif. (down 5.2). All five of the worst-performing metropolitan markets were reportedly heavily saturated with foreclosed homes, with Real Estate Owned (REO) properties constituting as much as 68 percent of the homes on the market.

The Clear Channel study uses a "rolling" quarterly assessment where sales data from the previous three months are compared to data from the four months preceding them. The approach allows the study to dampen out some of the variability that occurs in month-to-month comparisons while still being able to produce updated results once a month.