Home Sales Ahead of Last Year, Prices Stabilizing

August home sales reached a level 18 percent higher than August 2010. Traditionally, June is the highest sales month, but this year July and August were the two summer months that experienced higher sales than in 2010. In the August 2011 RE/MAX National Housing Report based on MLS data from 53 metropolitan areas, the inventory of homes-for-sale dropped for the 14th consecutive month, while total inventory remains almost 19 percent below the level in August 2010. And the Median Sales Price of homes sold in August, like July, was down fractionally, while the loss from last year’s prices continues to shrink.

The Median Sales Price for August was $189,831. This is just 0.6 percent below the price in July and 3.6 percent below the price in August 2010. Home prices have risen in 4 of the last 8 months, while on a year-over-year basis, the Median Price has improved for five consecutive months. Of the 53 metro areas reviewed for this report, 14 saw prices rise from July, and 10 saw prices rise over August 2010, including: Detroit +15.7 percent, Orlando +14.2 percent, Milwaukee, +10.6 percent and Pittsburgh, +2.2 percent.

Housing Prices Up for Quarter

Clear Capital released its monthly Home Data Index™ (HDI) Market Report today, with news of U.S. home price gains of 4.1 percent comparing the most recent rolling quarter to the previous one. The report shows recent gains off the record low in home prices experienced this past winter have not been enough to change the broader housing picture, which remains down 7.9 percent since June 2010, and down 1.8 percent from June 2009.

“Building off last month’s minimal quarterly gains, prices continue to correct from winter’s extended declines,” said Dr. Alex Villacorta, director of research and analytics at Clear Capital. “Although this is encouraging, many markets are still near, or at record lows as REO saturation remains a significant proportion of all sales activity.”

The company says the gains of 4.1 percent reported in this report are improving upon last month's 0.9 percent rolling quarter uptick. 

Year-over-year home prices however are mired in negative territory off last year's tax credit highs, with three out of the four regions (West, Midwest, and South) posting year-over-year price declines greater than -7.3 percent.

Driven by stronger spring and early summer sales, all quarterly prices are up significantly among the highest performing markets compared to the slower winter buying season. The markets of Milwaukee, Rochester and Pittsburgh posted the strongest quarterly gains on seasonal influences.

Houes in Pittsburgh

While REO saturation as a whole continued to be significant in highest performing markets, the average saturation rate fell to 22.7 percent, a three percent decline from last month. Rochester, Pittsburgh, Boston and New York led the way, posting single digit rates of REO saturation.

Elevated distressed home sale activity continues to take a toll on the lowest performing markets across the country. 

S&P: Seasonal Improvement in Home Prices in Dallas and Elsewhere

Data through May 2011, released by S&P Indices for its S&P/CaseShiller Home Price Indices, the leading measure of U.S. home prices, showed a second consecutive month of increase in prices for the 10- and 20-City Composites. The 10- and 20-City Composites were up 1.1 percent and 1.0 percent, respectively, in May over April. Sixteen of the 20 MSAs and both Composites posted positive monthly increases; Detroit, Las Vegas and Tampa were down over the month and Phoenix was unchanged.

Dalls showed a gain of .4 percent during the month and a 4.7 percent decline over a year period.

On an annual basis, Washington DC was the only MSA with a positive rate of change, up 1.3 percent. The remaining 19 MSAs and the 10- and 20- City Composites were down in May 2011 versus the same month last year. Minneapolis fared the worst posting a double-digit decline of 11.7 percent.

“We see some seasonal improvements with May’s data,” says David M. Blitzer, Chairman of the Index Committee at S&P Indices. “This is a seasonal period of stronger demand for houses, so monthly price increases are to be expected and were seen in 16 of the 20 cities. The exceptions where prices fell were Detroit, Las Vegas and Tampa. However, 19 of 20 cities saw prices drop over the last 12 months. The concern is that much of the monthly gains are only seasonal.

“May’s report showed unusually large revisions across some of the MSAs. In particular, Detroit, New York, Tampa and Washington DC all saw above normal revisions. Our sales pairs data indicate that these markets reported a lot more sales from prior months, which caused the revisions. The lag in reporting home sales in these markets has increased over the past few months. Also, when sales volumes are relatively low, as is the case right now, revisions are more noticeable.

“Other recent housing statistics show that single-family housing starts were up moderately in June, and are at about the same pace as a year ago. Existing-home sales were flat in June, reportedly because of contract cancellations and tight credit. The S&P/Experian Consumer Credit Default indices showed a continuing decline in mortgage default rates since last winter. Other reports confirm that banks have tightened lending standards in the past year, making it harder to qualify for a mortgage despite very low interest rates.

Combined, these data all support a continuation of the ‘bounce-along-the-bottom’ scenario we have witnessed in the housing market over the past two years.

“While the monthly data were encouraging, most MSAs and both Composites fared poorly in annual terms.

Nineteen of the 20 MSAs and the two Composites posted negative annual growth rates in May 2011. The 10-City Composite was down 3.6 percent and the 20-City Composite was down 4.5 percent in May 2011 versus May 2010. Minneapolis posted a double-digit decline in annual rate of 11.7 percent. The only beacon of hope was Washington D.C. with a +1.3 percent annual growth rate and a +2.4 percent monthly increase. We have now seen two consecutive months of generally improving prices; however, we might have a long way to go before we see a real recovery. Sustained increases in home prices over several months and better annual results need to be seen before we can confirm real estate market recovery.”

Dallas Real Estate Shows Improvement in Latest CaseShiller Index

Data through April 2011, released by S&P Indices for its S&P/CaseShiller Home Price Indices, the leading measure of U.S. home prices, show a monthly increase in prices for the 10- and 20-City Composites for the first time in eight months. 

The 10- and 20-City Composites were up 0.8 percent and 0.7 percent, respectively, in April versus March. Both indices are lower than a year ago; the  10-City Composite fell 3.1 percent and the 20-City Composite is down 4.0 percent from April 2010 levels. 

Six of the 20 MSAs showed new index lows in April – Charlotte, Chicago, Detroit, Las Vegas, Miami and Tampa.  Thirteen of the cities and both composites posted positive monthly changes. Dallas showed a 0.5 percent increase. 

“In a welcome shift from recent months, this month is better than last - April’s numbers beat March,” says David M. Blitzer, Chairman of the Index Committee at S&P Indices. “However, the seasonally adjusted numbers show that much of the improvement reflects the beginning of the Spring-Summer home buying season. It is much too early to tell if this is a turning point or simply due to some warmer weather.

“Other housing statistics show the same trends. Single-family housing starts were up in May, but still well below their 2010 levels and still very close to their 30-year low. Existing home sales rose in May, but are  still about 15 percent below last year’s pace and about 35 percent below their 2005 pace."

While foreclosures remain a large factor in most parts of the country, the S&P/Experian Consumer Credit Default indices show a small decline in the pace of new defaults since last November. Other reports confirm that banks have tightened lending standards in the past year making it harder to qualify for a mortgage despite very low interest rates.