Wednesday, August 26, 2009

Home Prices Show More Signs of Life

Raleigh real estate and Durham real estate real estate, Home prices rose again in the year's second quarter, but economists say it's too soon to call it a turning point for the beleaguered sector.

Apex real estate prices increased 0.4 percent from May to June after increasing 0.2 percent from April to May.

North Carolina Home SalesPrices, however, are still down significantly -- 11.9 percent -- when compared with June 2008.

For national home prices, the substantial 15.4 percent drop in June from a year earlier was the smallest decline since April 2008.

The gains are the first two consecutive quarterly increases in three years, although prices are at the same level as early 2003.

Adding to that momentum is rising consumer confidence. The New York-based Conference Board's Consumer Confidence Index reported Tuesday that confidence in August had rebounded from July because consumers became less concerned about the job outlook.

Home Price Indices measure the residential housing market by tracking changes in home values using repeat sales of existing homes.

Existing-home sales also show an upward trend this year, as the National Association of Realtors on Aug. 21 reported increases for four months in a row for the first time in five years.

In the Northeast, existing-home sales climbed 13 percent in July, the biggest gain of any of the four regions. However the median price was down 15 percent from a year ago because of the increase in foreclosed homes, which NAR said typically sell for 15 percent to 20 percent less than other homes.

Raleigh real estate, Durham real estate and Chapel Hill real estate also is seeing the upward trend in month-over-month statistics.

The median price of homes sold edged up to $430,000 in June from $429,000 in May, and the number of homes sold rose 51 percent in the same time period.

When comparing June prices with June 2008, however, prices and volume were down. A year ago, the median price was $515,000 and 23 more homes were sold during the month.

Sellers understand the over-inflation of prices that took place in 2004 to 2006, so the correction has already taken place.

That while drops in prices have varied across Bergen County, prices have fallen an average of 10 percent since 2005. That's opened up homeownership to a lot more people.

Realtors report increased sales and interest in homes priced at less than $500,000, which is considered lower end for the county. They also report a "strong demand" for homes in foreclosures. While the distressed prices hurt sales, they help reduce inventory.

The tone of the market has definitely shifted, but even with the pronounced rise in foreclosures, prices moved marginally upward. And that's a positive.

The U.S. Department of Commerce will release new-home sales figures today.

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