Tuesday, April 30, 2013

Home prices continue to rise, locally and nationally

The big news this morning on the real estate front is that home prices continued to pick up speed in February, showing the biggest gain since height of the housing bubble in 2006.

The S&P Case-Shiller index of home prices in 20 major markets showed a 9.3 percent rise over the last 12 months, the biggest yearly gain in the index since May 2006, which was one month after the index showed record-high home prices.

After that, the index showed a decline in prices almost every month until May 2012, when the turnaround began. Every month since then there has been gain in home prices, with each month's gain stronger than the one that came before.

In eastern Idaho, the widely held view is that home prices didn't fall as hard in 2008 because they hadn't risen at the same pace as they had in markets like Boise, Reno, Las Vegas or Phoenix.

Nevertheless, looking at the number from the Snake River Multiple Listing Service, the slowdown was quite real. Here are the median prices for single family homes and the number of homes sold in Bonneville County every February between 2006 and this year:

2006  -- $129,400     86
2007 -- $148,450      112
2008 -- $161,000      92
2009 -- $151,950      58
2010 -- $134,500      42
2011 -- $141,000      52
2012 -- $122,250      76
2013 -- $147,154      79

The housing recovery has been driven by a number of factors, including near record-low mortgage rates, a drop in foreclosures and reduced unemployment, all of which have helped lift both new-home sales as well as sales of previously owned homes. The rising home prices has helped bring back some buyers who had been reluctant to buy while prices were falling.

"Despite some recent mixed economic reports for March, housing continues to be one of the brighter spots in the economy," said David Blitzer, chairman of the index committee at S&P Dow Jones Indices.

But Stan Humphries, chief economist for home price tracker Zillow, told CNN there are signs in the market could slow down. "Regardless what data you look at, home values are clearly rising at an unsustainable pace," he said. The increases in the index may be distorted by the shift in transactions to private home sales from the foreclosure sales that had been dominating the market.