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 Dennis Norman This morning S&P/Case-Shiller Index report for August was released showing a deceleration in the annual growth rates of home prices from the month before in 17 of the 20 Metro areas covered by the report. The Case-Shiller Home Prices Indices for the 20 metros showed a decrease of 0.2 percent in home prices in August from July and an increase of 1.7 percent in home prices from the year before. Continue reading “Case-Shiller issues disappointing report on home prices“  Dennis Norman According to a report issued yesterday by CoreLogic, home prices in the St. Louis area decreased in August 2010 by 3.53 percent from the year before, over twice the US rate of price decline for the same period of 1.5 percent. However, distressed home sale prices are to blame and appear to be causing more damage in the St. Louis housing market than on the US housing market on average. I say this because the data shows if we exclude the distressed sales then home prices in St. Louis only declined 0.28 percent for the same period, so the distressed sales have increased the rate of decline by over 11 times! On a national level, excluding distressed sales reduces the decline to 0.4 percent, or just over a fourth of the rate with them included. f distressed sales are excluded then there was a 0.4 percent decrease in home prices from August 2009 to August 2010. Continue reading “Distressed home sales bring down prices in St. Louis“ Number of price-reduced homes on Market Rose 24 percent in September from 2009..
“..if a buyer hasn’t walked through the door in 30 to 45 days, a seller needs to lower their asking price. If a home hasn’t had an offer in six months, it’s time to rethink the sale..”
Dennis Norman According to a report issued today by CoreLogic, home prices in St. Louis increased in June by 1.4 percent over June 2009. This ends the four-month streak of increasing year-over-year home prices which for May was 3.49 percent. Continue reading “St Louis Home Prices Increase in June; Rate of increase slows“ Dennis Norman A report just issued by Zillow shows that home values in the United States continued to decline in the second quarter of 2010, with the Zillow Home Value Index falling 3.2 percent year-over-year and 0.6 percent from the first quarter to $182,500. The national rate of decline decelerated from the first quarter, marking the second consecutive quarter of slowing declines. Continue reading “U.S. Home Values Fall In 2nd Quarter; Negative Equity Declines Though“ Dennis Norman This morning S&P/Case-Shiller Index report for May was released showing that the annual growth rates in 15 of the 20 Metro Area’s their reports cover improved in May compared to April 2010. The 10-city composite is up 5.4 percent from the year before and the 20-city composite is up 4.6 percent from the year before. Continue reading “Case-Shiller; Housing market not in any form of sustained recovery“  Dennis Norman Multiple Offers and Homes Selling for prices ABOVE list price? Is this a reprint of a post from 2005? Nope. Believe it or not, this is exactly what was in a report released this morning by Zip Realty. The report is based upon home sales activity in the second quarter of this year and says that, despite slowdowns in home sales across the country, California is still the nation’s hottest spot for home buying activity. California was home to 91 out of the country’s 100 “hottest” zip codes in terms of home sales during the quarter. Zip Realty’s definition of a “hot” market is one in where “homes were selling on average for most above list price“. So being the cynic that I can sometimes be, and, seeing how economists and reporters are constantly “playing with” stats to make them illustrate their point (I would never do this of course:) ) I guess from this report one could instead say that more California home owners under-price their homes more than anywhere else in the U.S. But let’s just stick with the “glass is half-full” approach and say the California market is hot. Highlights from the report:
Dennis Norman Home sales activity was up in May, but the mix of sales shifted toward less-expensive properties in many cities throughout the U.S. according to the May 2010 Radarlogic Housing Market Report. In addition, the report states that while their home price composite index for the 25 metro areas covered did increase in May by 2.1 percent on a year-over-year basis, the “gains were not large enough to be described as a recovery” and “there was more evidence of weakness in the market than strength.”
Highlights from the report include:
Dennis Norman According to a report released by Trulia.com, 24 percent of the homes for sale as of July 1, 2010 have experienced at least one price cut. This is a 9 percent increase from the prior month. Western U.S. Leads with Price Reduction Increases For the first six months of this year, cities in the Western U.S. saw a reduction in their price declines, however for this month those same cities have experienced some of the largest surges in price reductions in the U.S. when compared to the prior month. Oakland saw a 38 percent increase in price reductions, San Diego 25 percent, Honolulu (wow, way west) 21 percent and Las Vegas reductions increased by 20 percent. Most of the largest U.S.cities saw Price Reduction Increases Twenty two of the top 50 cities across the U.S. experienced price reduction levels at 30 percent or more, compared to just 10 cities in the previous month. Minneapolis leads the way with 40 percent of its home listings experiencing at least one price cut. This is the third straight month that Minneapolis has held the top spot and no other city has reached the 40 percent mark since Trulia started tracking home price reductions in April 2009. With an average discount for price-reduced homes at nine percent, the city’s total dollar amount slashed from home prices was $30.1 million. Luxury Market Still Hardest Hit Luxury homes (those listed at $2 million and above) continue to be hit the hardest by price reductions with the average discount being 14 percent off list price. To see Trulia’s report showing price reductions for the 50-largest cities in the U.S. as of July 1, 2010 click here.
Dennis Norman According to a report issued today by CoreLogic, their home price index shows home prices in the U.S. increased in May, marking the fourth-consecutive month there was a year-over-year increase in home prices. U.S. home prices in May 2010 increased by 2.9 percent over May 2009. St. Louis home prices did better than the U.S. average, increasing by 3.49 percent in May 2010 compared with May 2009. No doubt some of the good news was the result of buyers rushing to buy a home before the April 30th deadline to receive tax credits. This will affect the market, and home prices, in a positive manner until these “tax-credit-induced” sales close by the recently extended deadline of September 30, 2010.
Dennis Norman This morning S&P/Case-Shiller Index report for April was released showing that theannual growth rates of all 20 Metro Area’s their reports cover improved in April compared to March 2010. The 10-city composite is up 4.6 percent from the year before and the 20-city composite is up 3.8 percent from the year before. However, in spite of this little bit of encouragement, David Blitzer, Chairman of the Standard & Poor’s Index Committee casts a negative light on the market by pointing out the, while this report does show some price gains, “many of the gains are modest and somewhat concentrated in California….moreover, nine of the 20 cities reached new lows at some time since the beginning of this year…”. Tax-Credit Boost to Market- Blitzer also stressed the impact of the homebuyer tax credit deadline on the market by saying “the month-over-month figures were driven by the end of the Federal first-time home buyer tax credit program on April 30th…eighteen cities saw month-to-month gains in April compared to six in the previous month.” A Recovery Does Not a Tax Credit Make- The Case-Shiller report shows results for April that, if fueled by a “real” market, may be sustainable but since it has clearly been fueled temporarily by the tax credits, it is not necessarily an indication that home prices have fully stabilized or that a housing recovery is underway. In the report Blitzer confirms this saying “other housing data confirm the large impact, and likely near-future pullback, of the federal program….recently released data for May 2010 show sharp declines in existing and new home sales and housing starts….inventory data and foreclosure activity have not shown any signs of improvement.” When Will Home Prices and The Housing Market Stabilize? Where’s the Recovery? Blitzer expects that it will be next year before we see “consistent and sustained boosts to economic growth from housing”. For what it’s worth, I agree…I don’t see much happening this year other than, hopefully, some markets finding their bottom and then beginning to stabilize.
Dennis Norman Today the S&P/Case-Shiller Index report for the first quarter of 2010 was released showing that the U.S. National Home Price Index fell 3.2 percent in the first quarter of 2010, but remains above it’s level from a year-earlier. In March, 13 of the 20 MSA’s covered by the Case-Shiller report, as well as both the 10-city and 20-city composites, were down for the month however both the composites as well as 10 of the 20 MSA’s showed year-over-year gains. The report cites the end of the tax incentives and the increasing foreclosure rate as reasons the housing market is seeing some “renewed weakness“.
Other highlights from the report –
“The housing market may be in better shape than this time last year; but, when you look at recent trends there are signs of some renewed weakening in home prices,” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. “In the past several months we have seen some relatively weak reports across many of the markets we cover. Thirteen MSAs and the two Composites saw their prices drop in March over February. Boston was flat. The National Composite fell by 3.2% compared to the previous quarter and the two Composites are down for the sixth consecutive month. “While year-over-year results for the National Composite, 18 of the 20 MSAs and the two Composites improved, the most recent monthly data are not as encouraging. It is especially disappointing that the improvement we saw in sales and starts in March did not find its way to home prices. Now that the tax incentive ended on April 30th, we don’t expect to see a boost in relative demand.”
The Federal Housing Finance Agency (FHFA) released their report on first quarter home prices today as well. The FHFA report data and methodology differs from NAR and Case-Shiller, in that the FHFA home price index is based only on the sale prices of homes that are financed with a conforming loan (by Fannie Mae and Freddie Mac’s standards). The FHFA report for the first quarter of 2010 shows home prices fell 1.9 percent from the quarter before, so not terribly far off from the 3.2 percent decline the Case-Shiller report showed. In contrast to the Case-Shiller report however, the FHFA report showed March’s home prices rose 0.3 percent from February. Also, the FHFA report shows home prices for this quarter fell 3.1 percent from a year ago.
St. Louis Home Prices Doing Better: For the St. Louis metro and surrounding areas, the median home price for the quarter ended April 30, 2010 was $130,000 an increase of 1.6 percent from the prior quarter’s median price of $128,000 and an increase of 8.3 percent from a year ago when the median home price was $120,000. In case you are wondering, the median home price for the St. Louis area has dropped 3.0 percent in the past six years.  Median Home Prices in St. Louis Metro and Surrounding Areas for Past Six Years - Source: Mid America Regional Information Systems (MARIS)
 Comparison of St. Louis Median Home Prices to Prior Periods - Source: Mid America Regional Information Systems (MARIS)
Where are home prices headed? As we are frequently reminded, “all real estate is local”, so there will be markets that do better than others, but in general I think we are in store for soft home prices for a while. I think after the “sugar-rush” of the tax credit incentive wears off as the deals close over the next couple of months, and the next wave of foreclosures hit the market we will see prices regress again in many markets, enough so to bring overall home prices in the US down modestly in the coming months.
Dennis Norman This morning the S&P/Case-Shiller Index report for February was released showing that, for the first time since December, 2006, the annual rates of change for their two composite home-price indices were positive. The 10-City Composite is up 1.4 percent from a year before and the 20-City Composite is up 0.6 percent from the same time last year. Unfortunately, 11 of the 20 cities included in the 20-City Composite had declines from the prior year, meaning that this positive bit of news is not “market-wide” but is the result of some metros with stronger markets.
On a positive note, 18 of the 20 metro areas in the 20-City Composite showed an improvement in their annual rates with February’s readings compared to the January 2010 figures, with Dallas and Portland being the only exceptions. We are not “out of the woods” yet – the fat lady hasn’t sang – “Beginning last November, each report showed gains as fewer cities reported year-over-year declines than in the previous month; those gains ended with this report. Further, in six cities prices were at their lowest levels since the prices peaked three-to-four years ago. These data point to a risk that home prices could decline further before experiencing any sustained gains. While the year-over-year data continued to improve for 18 of the 20 MSA’s and the two Composites, this simply confirms that the pace of decline is less severe than a year ago. It is too early to say that the housing market is recovering” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. “Nineteen of the 20 MSAs and both Composites declined in February over January. Fourteen of the MSAs and both Composites have now fallen for at least four consecutive months. In addition, prices reached recent new lows for six cities in February – Charlotte, Las Vegas, New York, Portland, Seattle and Tampa – sending a more cautionary message compared to the annual figures. While 14 MSAs and the two composites show improvement over their trough values reached in the spring 2009, we are not completely out of the woods“, said Blitzer. Foreclosures still overshadow the good news – “Existing and new home sales, inventories and housing starts all show tremendous improvement in their March statistics. The homebuyer tax credit, available until the end of April, is the likely cause for these encouraging numbers and this may also flow through to some of our home price data in the next few months. Amidst all the news, however, we should also pay heed to foreclosure activity, which have reached their highest level in at least the last five years. As these homes are put up for sale, we may see some further dampening in home prices“, said Blitzer. Other highlights from the report –
The month of March brought us some pretty great weather and also helped bring some home buyers out into the market. The homebuyer tax credits that are set to expire at the end of April probably played a role as well. As you can see from the chart below, March brought sales to the metro area, but as the average prices of homes sold show, it is definitely the lower end, or first-time homebuyer, market that is seeing the bulk of the activity. In most of the counties the average price of the homes sold in March is only about 2/3 of the average price of the homes listed for sale. The chart also shows that most the homes sold are selling at prices equal to about 90 percent of the original list price.
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According to a report released by
The average discount for price-reduced homes continues to hold at 10 percent off of the original listing price.
FHFA Shows Lower Home Prices in First Quarter Also:
Here in the St. Louis metro area (in which I include the City of St. Louis and the counties of St Louis, St Charles, Jefferson and Franklin) home and condo sales for October increased 7.0 percent to 2,375 units up from 2,219 units for September. As I reported last week in my St. Louis Real Estate News 