Tuesday, November 10, 2009

Home prices may be bottoming out

City of Wheeling, West VirginiaImage via Wikipedia

By Les Christie and Ben Rooney, CNNMoney.com staff writers
Last Updated: November 10, 2009: 11:07 AM ET

NEW YORK (CNNMoney.com) -- The bleeding in the housing market seems to be stanched, at least temporarily, according to home price data released on Tuesday.

Most U.S. cities saw gains in the median price of single-family homes sold during the three months ended Sept. 30, according to the National Association of Realtors' quarterly report on home prices. This is the second consecutive quarter of gains.

The national median home price was $177,900 in the third quarter, up $7,000 from the previous quarter. And while that down more than 11% from the third quarter of 2008, the pace of decline is slowing. In the second quarter of 2009, home prices fell 15.4% from the same period last year.

"The decline in the national median price has moderated recently," Lawrence Yun, NAR chief economist, said in a statement.

Yun said a shrinking supply of unsold homes suggests the housing market is getting closer to price stabilization. But he cautioned that a steady stream of financially qualified buyers is necessary to keep the fledgling housing recovery going.
0:00 /1:231 in 5 homes still underwater

NAR attributed much of the recent increase in home prices to the government's first-time homebuyer tax credit, which has helped revive home sales from a deep slump.

"We can't underestimate just how powerful a catalyst the first-time homebuyer tax credit has been for the housing sector," Yun said.

While a glut of foreclosed properties will continue to weigh on prices in the months ahead, "rising sales from the expanded tax credit should stabilize home prices by next spring," Yun said.

Despite the positive report, many clouds dot the housing market horizon. The darkest of those is the current employment picture. The latest release from the Bureau of Labor Statistics reported a national unemployment rate of 10.2%.

"An unemployment rate of 10.2% is a strong psychological impediment for anyone thinking of buying a house," said Ingo Winzer, president of real estate research firm Local Market Monitor Inc.

"Housing markets respond as much to psychological factors as to economic ones," he said. "So we won't see much of a pickup in home buying until the unemployment rate has turned downward."

Cheapest and priciest areas

The Cape Coral metro area in Florida recorded the largest decline: 40% to $98,000. the Cumblerland area Maryland and West Virginia had the biggest gain: 19.2% to $122,100.

The lowest-priced market in the nation is now Saginaw, Mich., where the median home sold for $61,400 during the quarter, a 6.7% drop over last year. The most expensive market was San Jose, Calif., with a median price of $566,000 -- although that's still a 12.9% discount from a year ago. To top of page

Reblog this post [with Zemanta]


Post a Comment


blogger templates | Make Money Online