June 8, 2012 (Jeff Alan)
Home prices posted their first year-over-year increase since September of 2010 during the latest rolling quarter ending in May as encouraging signs of price momentum begin to emerge according to Clear Capital’s Home Data Index (HDI).
National home values climbed 0.4 percent in the latest rolling quarter ending in May with three out of the four regions showing increasing home prices on both a quarterly and yearly basis.
Quarterly home values increased 2.7 percent in the West, 1.2 percent in the South and 0.4 percent in the Northeast with the Midwest recording the only decline of 2.0 percent.
Prices at the end of May were 0.1 percent higher than they were a year earlier, the first positive gain in year-over-year home prices in 21 months.
Three of the four regions also posted year-over-year price gains with the largest increase recorded in the West where prices were up by 1.9 percent over a year ago followed by the Northeast with a 1.6 percent annual gain and the South posted a gain of 0.9 percent from last year.
The Midwest also suffered the only decline in prices, falling 3.1 percent over the last year.
Dr. Alex Villacorta, Director of Research and Analytics at Clear Capital stated, “National real estate prices in May have finally moved past the continued losses of the last few years. The subsequent stabilization pattern seen in recent months has progressed into the start of moderate growth.”
The top performing markets over the latest quarter were the Phoenix – Mesa – Scottsdale, AZ area (+9.4%), the Seattle, WA – Tacoma, WA – Bellevue, WA area (+9.0%), Dayton, OH (+8.3%), Washington D.C. (+5.1%) and the San Jose, CA – Sunnyvale, CA – Santa Clara, CA area (+5.1%).
The worst performing markets over the latest quarter were the Detroit, MI – Warren, MI – Livonia, MI area (-10.4%), the Houston, TX – Baytown, TX – Sugar Land, TX area (-5.9%), the Milwaukee, WI – Waukesha, WI – West Allis, WI area (-5.2%), Memphis, TN (-4.3%) and Honolulu, HI (-3.8%).
Part of the gain in home prices can be attributed to a significant increase in REO-only home prices. Nationally, REO-only home prices have increased by 8.1 percent while non-REO home prices are still 0.7 percent below last year’s prices.
REO-only home prices over the last quarter and the last year improved the most in the West, the South and in the Northeast regions, helping to contribute to their improved housing prices while the Midwest was the only region to record year-over-year REO-only price declines.
“While gains in national home prices over the quarter and year were minimal in May, there are encouraging trends continuing to play out and gaining momentum beneath the surface. Strength in REO-only price trends as well as some early indications of price gains spreading from low tier sectors to the mid, and higher-priced homes is helping confirm that the country continues to make progress on its recovery, and we are expecting to see improvements extend over the next several months,” added Villacorta.
Tags: Clear Capital, housing prices, price declines, REO, saturation rate, consumer demand, metropolitan areas