Are St Louis Home Prices Really Increasing Or Are There Just Fewer Distressed Sales?

dennis-norman-realtorA report released today by Radarlogic suggests that the housing market is not really recovering as much as it may appear, particularly with regard to home prices.  The report says that, the 9.2 percent increase they saw in their home price index for the 12 month period ended November 30, 2012 was the result of a “significant shift in the composition of home sales and overstates the appreciation in individual properties.”  The report goes on to say if motivated sales (REO’s, foreclosures, short-sales) are removed from the data, then the “real” increase in home prices was just over half of what their index showed.

I took a look at the St Louis market to see if it was following suit or not.  What I found was, when looking at the same period as the Radarlogic report, the median home price in the five county “core” St Louis market went from $122,000 in November 2011 to $130,000 in November 2012, an increase of 6.5 percent.  However, when I remove the distressed sales from the stats, the median home sales price in November 2011 was $160,000 and November 2012 $161,000 for an increase of just over one-half of one percent.   My research supports Radarlogic’s notion that home prices are not really rising as much as they appear but instead appear to be higher as the result of fewer distressed sales which sell at significant discounts.

Report shows increase in home prices not real but just fewer distressed sales

saint-louis-real-estate-dennis-normanA report was just published by RadarLogic which said that, even though home prices in the 25 cities covered by their RPX composite index appeared to have increased in the past year, that this was the result of a large decline in the number of distressed sales at bargain prices and not an increase in home prices.  The RPX report, which covered June 2011 through June 2012, said home prices were pretty well flat during this period if you take out distressed sales.  This prompted me to take a look at the St Louis housing market to see how home prices did here during the same period, both with, and without, distressed sales included and the results were interesting…. Continue reading “Report shows increase in home prices not real but just fewer distressed sales

Report shows strong real estate market in February;   says it probably won’t last

dennis-norman-st-louis-radarlogic-home-prices-st-louis-realtorRadarlogic says, contrary to what other home price indicators suggest (hmm…could they mean Case-Shiller?), home prices strengthened considerably in February…. Unfortunately they also say the strength in the housing market probably won’t last

The latest housing market report by RadarLogic showed home prices in the 25 major metropolitan areas it tracks increased 1.9 percent in February from the month before (in contrast to the Case Shiller home price index which showed home prices fell a little under 1 percent from the month before) however was 3.18 percent lower than a year ago. Continue reading “Report shows strong real estate market in February;   says it probably won’t last

Is the housing market seeing the beginning of a "soft landing"?

Dennis Norman, St Louis REALTOR - Home Prices “We may indeed being seeing the beginning of at least a ‘soft landing’ in housing,” said Michael Feder, President and CEO of Radar Logic.

The latest housing market report by RadarLogic contained said, while trends in home prices remain negative in most major U.S. metropolitan areas, there are indications that market conditions are starting to improve. Continue reading “Is the housing market seeing the beginning of a "soft landing"?

Housing market has performed pretty well during past decade relative to other investments

Dennis Norman, St Louis REALTOR - Home Prices Despite massive loss of value over the last few years, the U.S. housing market has outperformed the stock market since 2000.

A report released recently by RadarLogic showed that, over the past decade, the housing market, in spite of all of it’s recent troubles, has still performed better in terms of an investment than other typical investments such as the stock market. Continue reading “Housing market has performed pretty well during past decade relative to other investments

The ‘Futures’ of Housing…

Dennis Norman, St Louis REALTOR - Housing Futures - Home Prices - Radarlogic - CBOE Futures ExchangeRadar Logic, a source I often tap for housing market data, announced that, in cooperation with CBOE Futures Exchanges, they are introducing housing futures in the form of tradable contracts. These contracts will be based upon “RPX”, Radar Logic’s real estate price metric.

So, just like you can invest on corn futures, oil futures and many other commodities, you can now “bet” on the future of home prices as well. These futures contracts will be based upon the Radar Logic 28-day real estate index and will begin trading on October 27th. For more info click here.

 

Increased foreclosure activity and potential REO inventory growth point to trouble for real estate market

Signs point to trouble ahead for the housing market as recent growth in foreclosure filings suggest REO Inventories may balloon in coming months according to the Radar Logic July 2011 Monthly Housing Market Report. On the heels of a couple of upbeat articles I’ve been able to write about the market, I get hit with the glumness of this one….ugh. However, as I have said before, I have a lot of respect for this company and have found their market forecasts to be reasonably accurate, unfortunately. Continue reading “Increased foreclosure activity and potential REO inventory growth point to trouble for real estate market

2011 Real Estate Market Performing about as Poorly as Predicted Thus Far

Radarlogic, real estate data and analytics company that frequently disagrees with the National Association of REALTORS® view of the housing market, released their RPX Monthly Housing Market Report for May 2011 yesterday and in it had a scorecard showing how their rather bleak predictions they made at the end of 2010 for the 2011 housing market were holding up. Unfortunately, as you will see below, it seems many of their predictions have been accurate and the housing market is performing as poorly as they expected in many areas. Continue reading “2011 Real Estate Market Performing about as Poorly as Predicted Thus Far

Report says recent good news on housing market is misleading; recovery is a long way off

Following last week’s somewhat encouraging Pending Home Sales report from the National Association of REALTORS which showed increased home sales activity, Radar Logic issued a much less encouraging report. Their report, titled “Don’t be Misled by Gains in Home Price Indices and Pending Homes Sales; Housing Recovery is Still a Long Way Off” pretty much says it all in the title. Continue reading “Report says recent good news on housing market is misleading; recovery is a long way off

February home price index hits eight year low; St Louis is sixth best of the 25 metros

RPX Composite Home Price Fell to Lowest Level since March 2003 – St. Louis ranks 6th of 25 metros on one year rate of change of home prices.

Radar Logic published it’s Housing Market Report for February showing that it’s “RPX Composite Price”, for the 25 metro areas covered by the index, including St. Louis, fell 0.7 percent from January and 4.3 percent from the year before. St. Louis home prices fell 2.4 percent from January and 4.4 percent from a year ago. Continue reading “February home price index hits eight year low; St Louis is sixth best of the 25 metros

January home price index reaches new low

RPX Composite Home Price Fell to Lowest Level since April 2003

Radar Logic published it’s Housing Market Report for January showing that it’s “RPX Composite Price” fell 3.8 percent from December and 3.4 percent from the year before. Continue reading “January home price index reaches new low

Motivated home sales make up over 30 percent of market at discounts of 40 percent

Radar Logic published it’s “RPX Year in Review 2010” for the U.S. real housing market which illustrates the significant negative impact distressed sales have on home prices and the real estate market as a whole. The report reveals that “motivated sales” (sales that include REO’s, sales by financial institutions, short-sales, etc) made up less than 5 percent of the home sales in the 25 major metropolitan areas covered by the report until 2007 when the rate rose above 5 percent, ultimately peaked in 2009 at around 38 percent and then last year settled in around the 31 percent mark.

Continue reading “Motivated home sales make up over 30 percent of market at discounts of 40 percent

Dueling Economists: Home Prices Up or Down?

Dennis Norman

Naturally, no sooner than I finish writing my post this morning about the Case-Shiller report on home prices in which I actually got to report somewhat “positive” news, my bubble is burst. RadarLogic, another company that has their own home price index that I like, came out with a report saying the Case-Shiller report was too optimistic and that their (RadaLogic) home price index was a better reflection of home values. Continue reading “Dueling Economists: Home Prices Up or Down?

Home Prices Are Not Recovering

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:

  • Home prices have remained stagnant since the beginning of 2009- while there were seasonal periods of strength sine then, overall the trend has been relatively flat.
  • Property sales in the 25 metros covered by the index increased in May by 41 percent from the year before.
  • Motivated sales decreased as a percent of total sales on a year-over-year basis but still accounted for 24 percent of home sales (RPX does not include short-sales in this number).
  • Since January 2009 sales has increased in the 25 metros covered by 45 percent.
  • Only nine of the 25 metros tracked by Radar Logic showed annual price improvement. Only 20 showed month-over-month improvement.

The 25 metro areas that make up the Radar Logic composite index are: Atlanta, Boston, Chicago, Charlotte, Cleveland, Columbus, Detroit, Denver, Jacksonville, Los Angeles, Las Vegas, Miami, Minneapolis, Milwaukee, New York, Philadelphia, Phoenix, Sacramento, Seattle, San Francisco, San Diego, San Jose, St. Louis, Tampa and Washington, D.C.

Real Estate Market Favoring Lower Priced Home Sales Since 2006

Dennis Norman

A report just issued by Radarlogic shows that, since 2006, lower-priced homes have been selling better than higher-priced ones. Given the current economy this is not all that surprising but it is a dramatic change from what the norm was during the “housing boom”.

Highlights from the report include:

  • During the housing boom (2000 through 2005) sales of homes for less than $350,000 remained pretty constant on a year-over-year basis while homes in the $350,000 – $900,000 range increased by 32 percent per year on average.
  • In 2006 the number of home sales in all price ranges began to decline and growth in housing prices slowed and then came to a halt for the 25 largest metropolitan areas in the U.S. (including St. Louis). This continued through 2007 and 2008 then stabilized in early 2009.
    • During this period the number of homes sold in the $350,000 – $900,000 range declined by an average of 25 percent per year, while home sales less than $350,000 declined by a slightly lower 22 percent per year.
    • In January 2006 homes selling for $350,000 – $900,000 accounted for 36 percent of all home sales and homes under $350,000 accounted for 60 percent of sales. By January 2009 this had changed to 29 percent and 68 percent respectively.
    • Since January 2009, the number of homes selling for less than $350,000 have increased 12 percent year-over-year on average while the number of homes selling in the $350,000 – $900,000 range have decreased 8 percent year-over-year.
    • Home sales of less than $350,000 has now grown to 73 percent of all home sales and homes sales of $350,000 – $900,000 has decreased to 23 percent.

Record Foreclosure Rate Could Hurt Demand For Homes and Slow Recovery

Dennis Norman

In a report just issued by Radarlogic there is some good news for the housing industry as in the report Michael Feder, President and CEO of Radar Logic, states “the evidence continues to support the view that housing has stabilized and is in the early stages of recovery.” However, the report also reminds us that RealtyTrac reported that foreclosure filings set a record in March, with filings reported on 367,056 properties, the “highest monthly total since RealtyTrac began issuing its report in January 2005. The report indicates an increasing concern about the threat that foreclosures pose to housing demand, and thus to a timely recovery of the housing market.

radar logic“We believe that low home prices and low mortgage rates will continue to spur sufficient housing demand to absorb foreclosure- driven increaseses in supply at current price levels,” said Quinn Eddins, Readar Logic’s Director of Research. “Nevertheless we will watch foreclosure rates and sales activity closely in the coming months for signs of lagging homebuyer confidence.”

Highlights from the report include:

  • Of the 25 Metro Areas covered by the report, St. Louis ranked 10th in terms of year-over-year price change with a loss of 0.3 percent and ranked 10th in month-over-month price change with a loss of 2.8 percent (see chart below)
  • In year-over-year change in terms of number of home sales, St. Louis ranked 22nd with an 11.9 percent increase and ranked 18th in month-over-month change with a 9.4 percent increase in number of transactions.
  • The 25-MSA RPX Composite price remained flat in February on both a month-over-month and year-over-year basis. The horizontal price movement represents the best one-month price trend for the month of February since 2007. The three-month price trend ending February 2010, while negative, marked an improvement over steep February declines in 2008 and 2009.
  • The stability in the 25-MSA RPX Composite price from January to February 2010 was driven by increases in the RPX prices for western MSAs. The RPX composite price for the western region increased 2% in February on a month-over-month basis, while the RPX prices for the Midwest, Northeast and South each declined 2%.
  • The 25-MSA transaction count increased 37% between February 2009 and February 2010. As can be seen in Exhibit 3, this was the first year-over-year increase during the month of February since 2005. The 25-MSA RPX transaction count increased 16% month over month. In absolute terms, this one-month trend was similar to the February gains in 2006 through 2009. The three-month transaction count trend was more negative than it has been in years due to the large and rapid decline in transactions in December and January.
  • On a year-over-year basis, transactions increased the most in MSAs that have been hit hardest by foreclosures: Las Vegas, Chicago, Miami and Detroit (please see Exhibits 9 and 14). The RPX transaction count for Las Vegas has increased almost 300% since February 2009. The largest month-over-month increases in sales activity occurred in Southern California, with Los Angeles and San Diego both exhibiting 39% gains in transaction counts.

radar-logic-february-2010radar-logic-february-2010-transaction-counts

radar-logic-february-2010-msa-price-change

St Louis Real Estate – Report Shows Market Stalled out In December

Dennis Norman

Radarlogic Housing Market Report Shows First November-December Increase in Home Prices Since 2004 For the US – However It shows a Decrease For December for St. Louis –

When I received the Housing Market Report from  Radarlogic, I was happy to see some good news; home prices increased in December from November and a 44 percent increase in the number of homes sold in December versus a year before.  Unfortunately those numbers were based upon Radarlogic‘s RPX Composite Price, which tracks home prices in 25 major metropolitan areas (including St. Louis) and when I drilled down to the St. Louis Housing Numbers they were not as encouraging.

 radar logicThe report shows St. Louis home prices decreased from November to December by 6.9 percent, as opposed to the increase of 0.2 percent for the 25 metro areas combined. Housing transactions in December 2009 in St Louis increased 5.5 percent from a year ago, however this is far less than the 44 percent increase in transactions for the 25 city composite. From November to December St Louis saw a decrease of 54.9 percent in the number of housing transactions, a much larger decline than the 11.0 percent decline for the 25 city composite.

Radarlogic’s report bases it’s home price data on the price per foot homes sell for versus  the sales price of the home.  I think this is a more “apples to apples” approach and results in more accurate data than looking at median home prices which could be affected by an increase in activity in a particular price range of home.  Having said that I still wanted to check their data against data I compiled from the MLS.  Here are my findings from MLS data:

  • The median price of homes and condos sold in St. Louis in November 2009 was $131,500.  For December the median price was $125,000 for a decline of 4.9 percent. Not far off from the 6.9 percent decrease in the Radarlogic report. 
  • There were 1,011 homes and condos sold in St. Louis in December 2009, a decrease of 2.97 percent from a year ago.  The Radarlogic report showed an increase of 5.5 percent so there is some disparity here.
  • December 2009’s home and condo sales of 1,011 was a decrease of 33.8 percent from November 2009 sales of 1,527 units.  This is a smaller decrease than the 54.9 percent decrease shown in the Radarlogic report.

Overall I think the research I did supports the trend shown in the Radarlogic report for the St. Louis housing market; some softness in prices and  a surge of home sales in November from the tax credits.

House Prices in St Louis Increase in June; St Louis ranks 5th in 2-year house price change

Dennis Norman

Dennis Norman

According to the Housing Market Report that was issued this morning by Radarlogic, home prices increased in June from the previous month in 23 out of the 25 metropolitan areas tracked by their company.  St. Louis was among the 23 metros that showed an increase in home prices in June over May.

Overall the composite for all 25 metros showed a 3 percent gain in price from May to June representing one of the largest monthly gains reported by RadarLogic since June 2000.   St. Louis home prices increased 2.2 percent over May.

There has been a trend of price increases reported for the 25 metro areas for the past few months. In fact, the increase in the Radar Logic Composite from February to June outpaced the house price gains over the same period during the previous threes years, and the increase in house prices from April to June was the largest since the beginning of Radar Logic’s date in 2000. radar logic

Continue reading “House Prices in St Louis Increase in June; St Louis ranks 5th in 2-year house price change