Some locations in US see property market well on road to recovery

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Real estate figures in the US are presenting a confusing picture for buyers and sellers as some indicate that previous gains have been wiped out while others report a general rise in prices.

It is a sign that some areas will recover faster than others and demand is still fluctuating depending on location. At least the figures give an indication of where prices are still going down.

According to the latest figures from the Federal Housing Finance Agency US home prices fell 0.3% on a seasonally adjusted basis from July to August, erasing the 0.3% gain between June and July.

Its monthly housing price index also shows that for the 12 months ending in August prices fell 3.6% and the index is 10.7% below its April 2007 peak.

Regionally, Alaska, California, Hawaii, Oregon and Washington states experienced a 1.2% increase in seasonally adjusted prices from July to August, the greatest of the nine divisions. Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia and West Virginia saw a 1.6% decrease in prices during the same period, the biggest loss in the country.

The greatest increase was in Arizona, Colorado, Idaho, Nevada, New Mexico, Montana, Utah and Wyoming where prices were up 7.8% on a seasonally adjusted basis. While Arkansas, Louisiana, Oklahoma and Texas saw a 0.4% increase year on year, the only division to have an annual increase in prices.

The latest residential property index from Radar Logic shows that home prices and home sales in 25 metropolitan statistical areas (MSAs) increased 1% and 1.9%, respectively, from July to August.

The average price change from July to August for the past 10 years is 0.1%, but the first-time homebuyer tax credit, which nears expiration, is adding demand in the market, Radar Logic said.

The report predicts that pending sales and mortgage applications for purchase suggest that growth could continue for the next few months. ‘But given the expected seasonal decline in activity in the fall, that strength could take the form of a modest price gain or a milder-than-average price decline through the winter,’ said Radar Logic president and CEO Michael Feder. He is confident that recovery is underway and that concerns about a glut of foreclosure properties coming onto the market and forcing prices down is exaggerated. ‘The threat of pending foreclosures to the housing market is, in our view, overstated and we believe there is strong evidence that housing supply and demand are returning to more normal levels,’ Feder added.

 

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