The drop in home values is over – at least for now – in four metropolitan areas, a sign that the US housing downturn may be easing, according to a new report.
The price of single-family homes rose slightly in April in Cleveland, Dallas, Denver, and Washington, according to the 20-city S&P/Case-Shiller Home Price index, released Tuesday (pdf). That marked the first time home prices had risen in four metro areas in a single month in nearly two years.
While the overall value still fell 0.9 percent in the 20-city composite index from March to April, it was the smallest percentage decline in 20 months. Compared with a year ago, the index was down 18.1 percent, which was a smaller year-over-year decline than in March.The new numbers represent growing evidence that the housing market is bottoming.
“The stock market bottomed in March and measures of consumer confidence have turned upward," said David Blitzer, chairman of Standard & Poor’s index committee, in a statement. "This report shows that these better spirits are also appearing in the housing market.”
A month ago, the index showed monthly prices were down in all 20 of the metropolitan areas that the index covered. But the declines were so small in three cities – less than 0.3 percent – that they were essentially flat. With four cities now pointing up, four other cities are now also showing almost negligible declines, especially Chicago, down only 0.2 percent from March to April.
Of course, the index has recorded previous upturns that didn't last. Last May, five of its 20 cities were trending upward from the month before. But all five resumed their downward slide. Will this time be different?
Perhaps. Some real estate analysts are seeing a strengthening in the low end of the market as first-time buyers (buoyed by an $8,000 tax credit) and others look to snap up a great deal. But the middle- and upper tiers of the market may slide more as unemployment takes hold and fewer established families can afford the mortgage payments.
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