Asking Prices Stage Rebound in Key Housing Markets

While the housing and mortgage mess are likely to drag on for some time, signs of life in the primary market may have emerged during April — mirroring similar hopeful trends in the secondary mortgage market recently. Prices of properties listed for-sale last month fell in only seven of 25 major markets, according to a report published late last week by real estate research and analysis firms Altos Research and Real IQ. And these days, news that is less-bad than it has been is worth noting: during February, asking prices fell in fourteen key housing markets, by way of comparison. That’s not to say things are completely on the mend, of course. A 10-City composite price index of asking prices still found a decline of 0.9 percent over the past three months, after all, with the same ten cities dropping 0.6 percent during April alone. Asking prices fell at the fastest rate in Las Vegas–down 2.7 percent during April, according to the report. The largest three-month declines occurred in Las Vegas and Philadelphia, off 5.1 percent and 4.5 percent, respectively. But while asking price declines continued to swamp gains, the fact that there were actually gains to be found is telling — certainly an improvement over the past 8 to 10 months, which have seen prices in a literal freefall in most housing markets. Listing prices rose at the fastest rate in Denver, up 2.6 percent in April, and Charlotte, up 2.1 percent. Prices also increased by more than one percent in Boston, Houston, Dallas and San Francisco during the month. “While this is not shaping up to be a typically strong spring selling season,” said Stephen Bedikian, partner and research director for Real IQ, “we are now seeing price stability or price increases in most markets. During April, only the most troubled markets such as Las Vegas, Miami, Tampa, Philadelphia and Phoenix, continued to show asking price declines.” Of course, asking prices may not translate into final sales prices — meaning that stability in asking prices may merely reflect sellers’ desire to maintain some sort of price floor. And asking prices aren’t the only factor in assessing any housing market; inventories matter, too. By that measure, inventories are still rising; and that may yet reflect the need for further drops in asking prices during the months ahead. For-sale listed property inventories increased in 19 of 25 markets during April, according to the Altos/Real IQ report; that compares to listing inventory increases in 17 markets during March. But the increase in inventory build-up appears to be slowing: inventory in the Altos 10-City composite markets rose just 0.8 percent for the month, and 5.6 percent during the most recent three-month period. In March, inventory had built at nearly a 5 percent clip. For the Altos 10-City composite, the average days-on-market was 111 days–an improvement from 119 in March and 122 in February, according to the report. Miami and Detroit, two cities representing opposite ends of the housing crisis, experienced the longest time-on-market spans with an average days-on-market of 153 and 143, respectively. Austin led all markets with the fastest rate of inventory turnover at an average of 67 days-on-market. “Inventory buildup is typical during the spring selling season, but so far it has been fairly modest and that is reflected in the decline in average days-on-market,” said Michael Simonsen, CEO and co-founder of Altos Research. “Tight mortgage credit, foreclosures, and economic fears continue to put pressure on the real estate market but if inventory growth remains restrained, we may see supply and demand balance out.” For more information, visit http://www.altosresearch.com and http://www.realiq.com.