Uncategorized December 4, 2012

Seattle-area home prices maintain upward march

Prices were up 4.8 percent from September 2011, setting yet another post-bubble record. All signs point to steady recovery in the housing market.

By Eric Pryne Seattle Times business reporter

Seattle-area home prices kept climbing in September, according to the closely watched Standard & Poor’s / Case-Shiller home price index.

Prices were up 4.8 percent from September 2011, setting yet another post-bubble record. August’s 3.4 percent year-over-year gain had been the previous high.

Seattle-area prices now have increased year-over-year for five straight months, according to Case-Shiller.

The numbers are for the Seattle metropolitan area — King, Snohomish and Pierce counties. The September statistics, the most recent available, were released Tuesday.

Seattle prices also increased 0.3 percent between August and September, reversing a 0.1 percent decline from July to August.

Nationally, Case-Shiller’s 20-city composite index was up 0.3 percent month-over-month and 3 percent year-over-year. Eighteen of the 20 metropolitan areas Case-Shiller tracks saw prices rise from September 2011 levels, with only Chicago and New York experiencing declines.

In Phoenix, prices jumped 20.4 percent over the 12-month stretch to lead all cities; prices in Atlanta showed a modest 0.1 percent increase, ending 26 straight consecutive year-over-year declines.

Prices increased in 13 cities between August and September, led by 1.4 percent increases in Las Vegas and San Diego.

“It is safe to say that we are now in the midst of a recovery in the housing market,” said David Blitzer, chairman of the Index Committee at S&P Dow Jones Indices.

When seasonal factors are taken into account, September’s increase from August is even more impressive, he added.

The Seattle area’s Case-Shiller score for September was 142.09, meaning prices were 42.09 percent higher than in January 2000. The metropolitan area’s high, 192.30, came in July 2007.

The region’s lowest score since the real-estate bubble burst, 128.99, occurred in February. Since then prices have risen a little more than 10 percent.

But, despite those gains, Seattle’s September Case-Shiller score still is lower than it was from March 2005 to October 2010 — a stretch of more than five years.

Two experts offered differing forecasts on what’s immediately ahead for housing nationally.

“We will see the market continue to strengthen as inventory available for sale continues to decline,” said Richard Green, director of the University of Southern California’s Lusk Center for Real Estate.

“Additionally, Case-Shiller is a month behind, so these results do not reflect the full strength of price movements that occurred in October and so far this month.”

But Stan Humphries, chief economist at Seattle-based online real-estate marketplace Zillow, said September probably is “the last hurrah” this year for month-over-month price gains.

He attributed that to seasonal factors and a projected increase in the number of bank-repossessed homes in the sales mix.

“This shouldn’t, however, be a cause for concern,” Humphries added, “as the Case-Shiller indices will still end the year up more than 3 percent from year-ago levels, clear evidence of a durable housing recovery.”

Steady increases in home prices have helped encourage more potential buyers to come off the sidelines and purchase homes. And more people may put their homes on the market as they gain confidence that they can sell at a good price.

Higher home prices can also make homeowners feel wealthier and more likely to spend more. Consumer spending accounts for about 70 percent of the U.S. economy.

A big reason for the rebound is that the excess supply of homes that built up before the housing crisis has finally thinned out. The number of previously occupied homes available for sale has fallen to a 10-year low. The inventory of new homes is also near the lowest level since 1963.

At the same time, more people are looking to buy or rent a home after living with relatives or friends during and immediately after the Great Recession.

Those trends are also pushing up home sales and construction. Sales of previously occupied homes are near five-year highs, excluding temporary spikes in 2009 and 2010 when a homebuyer tax credit boosted purchases.

Builders, meanwhile, are more optimistic that the recovery will endure. A measure of their confidence rose to the highest level in six and a half years this month. And builders broke ground on new homes and apartments at the fastest pace in more than four years last month.

Information from The Associated Press is included in this report.

Eric Pryne: epryne@seattletimes.com or 206-464-2231