Home Prices Rebound 1.1% after Seven Down Months: IAS

Wed, May 12, 2010


The U.S. housing market is showing some signs of life, according to the default management and valuation firm Integrated Asset Services, LLC (IAS). The Denver-based company said Tuesday that its national benchmark for residential property prices gained 1.1 percent in March.

The increase follows seven straight months of declines recorded by the IAS360 House Price Index. With the modest rebound, IAS says its index is down 23.6 percent from the price peak of July 2007. March’s close leaves the benchmark at first-quarter 2004 levels.

Big monthly gains in two of the four U.S. census regions-3.2 percent in the Midwest and 2.5 percent in the South-accounted for the bulk of the monthly turnaround in March. The West did manage a slight 0.8 percent improvement, but the Northeast, mostly on weakness up and down the Washington-to-Boston corridor, slipped 0.4 percent.

“Any gain in the IAS360 is well-received, of course, but one month-over-month improvement is hardly evidence the national housing market is recovering,” said Dave
McCarthy, president and CEO of Integrated Asset Services. “In fact, our neighborhood trend lines indicate house prices have not found a bottom in many parts of the nation.”

IAS data confirms the nation’s major metropolitan statistical areas (MSAs) are indeed moving in different directions.

On the positive side, the three big California MSAs (San Francisco, Los Angeles, and San Diego), as well as Chicago and Miami all registered respectable gains in March. The San Diego metro posted the largest increase in IAS’ study, with prices there up 3.7 percent.

But on the other end of the scale, the metros of Boston, New York, and Las Vegas all lost ground. For its part, the Las Vegas MSA has now fallen without interruption since July of 2006, with prices there currently hovering around levels last seen at the end of 2000.

Meanwhile, the homebuyer tax credit, which offered up to $8,000 to first-time buyers and $6,500 to repeat buyers, expired at the end of April. While the actual stimulus effects of the two home purchase tax credits won’t be known for months, it would appear the programs contributed favorably to March’s activities. And since homebuyers have until June to close on properties under contract by April 31, the programs could end up influencing housing statistics for weeks to come.

“We can’t say for certain how much the federal support programs actually helped, but we do know housing demand will fall back a bit with their expiration,” McCarthy said. “I’m actually more concerned about the growing number of foreclosed houses adding to supply. I’m afraid the combination of these factors could pressure home prices in neighborhoods around the country for years.”


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