From HW:
What double dip?
House prices in the United States are reaching new levels of volatility, defying trendy labeling.
Tuesday news from Standard & Poor’s/Case-Shiller index found the average price of a single-family home reached a new low in the first quarter and is now at 2002 levels.
However, mortgage data tracker and industry service provider CoreLogic found Wednesday the average national price for a home increased a marginal 0.7% from March to April. It is the first increase since the expiration of the homebuyer tax credit in mid-2010, CoreLogic notes. Last month, the home price index from CoreLogic posted a decline of nearly 6%.
The CoreLogic year-over-year number, however, resembles the negative findings of the S&P index. National home prices, including distressed sales, declined by 7.5% in April 2011 compared to April 2010. Excluding distressed sales, year-over-year prices declined by 0.5% in April 2011 compared to April 2010.
“While the economic recovery is still fragile and one data point is not a trend, the month-over-month increase based on April sales activity is a positive sign. This is the first month-over-month increase in the HPI since government support for home buying was removed, and it provides reason for cautious optimism,” said Mark Fleming, chief economist for CoreLogic.
Even more notable is the top states that saw home price appreciation are outstripped by the massive declines seen in the top five declining markets.
Overall, the five areas with the highest appreciation were: North Dakota (+4.2%), Vermont (+3.4%), New York (+3.2%), Washington D.C. (+2.2%) and Mississippi (+1.4%). The five states with the greatest depreciation were: Idaho (-15.2%), Michigan (-13.2%), Arizona (-11.9%), Rhode Island (-11.6%) and Nevada (-11.4%).
California’s 12-month HPI was -5.4%, but excluding distressed sales it was +1.2%.
It important to remember that the case-shiller index lags quite a bit. The March case shiller is actually a 3 month average that includes Jan, Feb, and March 2011. Case shiller won’t really represent the spring selling season until the May numbers are released in late July. The April numbers that come out next month might be a decent representation.
While it would appear that the higher end markets like NCC are doing well there’s certainly a bit of a hangover from the tax credits in the lower-middle tier markets even here in San Diego. It’s probably about what you’d expect, sales down somewhere between 5-10% YoY at the county level and prices down a bit.
Well, looking at OC area, the May sale will be even worst.
You can get a feel for the psychology of the market by looking at the data over at housing tracker. http://www.deptofnumbers.com/asking-prices/ . When the asking prices for a certain region peak during a season they almost never go back up until the following spring.
In my area, prices have already peaked this year… so we’re probably going to have a bear market until next spring. San Diego seems to hanging in there for the moment. There’s a small number of markets that didn’t (relatively) fall very much and seem to be recovering or at least holding their value, and San Diego is one of them.
If we were in a stronger recovery, 2001-2002 prices would be where I’d expect “bottom” to be, since I have believed for some time now that all “growth” in the US economy since that time was smoke and mirrors that has since been removed. But I think we’re either in or about to go into what I have previously called “reverse bubble,” a period of malaise in which prices actually drop below a realistic “bottom” (whatever that is_ and stagnate there for a year or two before any reliably upward trend starts.