Home-Price News Seasonal but Positive

Metro Chicago real estate values have gone up for the first time in nine months.
The Standard & Poor/Case-Shiller Home Price Index was released Tuesday to show that Chicago-area home prices rose 1.7 percent from April to May.
The index is still 8.1 percent lower than it was in May 2010. In fact, home prices around Chicagoland are closer to the values seen in May of 2001, but at least it’s a move in the right direction.
small to big homes with a graph marking upward trendNationally, U.S. home prices rose for the second straight month, and 16 of the 20 largest cities posted price increases.
The only states to not show a rise in home values in May were Phoenix, which went unchanged, and Detroit, Tampa and Las Vegas, which were not only down but also posted new index level lows.
Year-over-year home values are still down in 19 of the 20 largest cities — Washington D.C. was the only area that saw an increase of 1.3 percent — and that has stopped the good-news celebration.
“We see some seasonal improvements with May’s data,” said David M. Blitzer, Chairman of the Index Committee at S&P Indices. “This is a seasonal period of stronger demand for houses, so monthly price increases are to be expected and were seen in 16 of the 20 cities. The concern is that much of the monthly gains are only seasonal.”
Blitzer cited these recent housing trends:
*Single-family housing starts in June are at about the same pace as a year ago.
*Existing-home sales in June were flat, reportedly because of contract cancellations and tight credit.
*The S&P Experian Consumer Credit Default Indices showed a continuing decline in mortgage default rates since last winter.
*Reports confirm that banks have tightened lending standards in the past year, making it hard for homeowners to qualify for a mortgage despite low interest rates.
“Combined,” Blitzer said, “these data all support a continuation of the ‘bounce-along-the-bottom’ scenario we have witnessed in the housing market over the past two years.
“We have now seen two consecutive months of generally improving prices; however, we might have a long way to go before we see a real recovery. Sustained increases in home prices over several months and better annual results need to be seen before we can confirm real estate market recovery.”