Home prices rising in many markets, but not Balt. area
A real estate data firm says home prices rose in all major metro areas in the last four months save for two places -- one of which is Baltimore.
Prices in the Baltimore metro area dropped 1.8 percent in the March through June period, compared with the previous three months, according to the California-based Clear Capital. The only other large market it recorded price declines in was Bridgeport, Conn., down 2.5 percent.
Our region has been on Clear Capital's "lowest performing major markets" list for a while. It was sixth in the last report.
Among the gainers were 10 metro areas with double-digit increases -- yes, just compared with the previous three months. Memphis was No. 1 with a nearly 21 percent jump.
Our cousin to the south, the Washington metro area, was up 7 percent, the 14th largest increase.
Want to guess why so many regions showed price gains?
Yeah, not exactly a hard question:
"Price trends nationwide have a seen a considerable upswing driven in large part by the flurry of recent sales attributed to the tax credit and springtime buying activity," Alex Villacorta, Clear Capital's senior statistician, said in a statement. "This month's national quarterly gains are certainly a positive sign that many markets have responded to the tax credit incentive, but overall markets remain volatile as evidenced by the six month price change keeping mostly flat."
Some metro areas, meanwhile, are still "as much as 54 percent below their 2006 peaks," he said.
Baltimore wasn't nearly that hard-hit, which could be part of the reason prices continued to fall during the tax-credit months while other areas rose. Certainly, the number of Wonk commenters saying that local homes for sale are overpriced outnumbers those arguing the reverse. In a recent poll here about how market conditions are affecting renters' ability to buy, the most popular answer was, "I haven't bought yet because prices are still too high for me."
What happens in the D.C. area does ripple outward, though. If prices continue to rise around the nation's capital, it's probably only a matter of time before the trend comes north.
How much time? No idea. It's probably hard for anyone to say if prices will continue to rise around the nation's capital from here out out, considering that this spring was goosed by the tax credit.
A note about the Clear Capital data: The firm draws its sales figures from assessors' and recorders' offices, calculating price by comparing repeat sales of the same homes over the years.
It might seem odd to look at the most recent four months rather than three, but there's a reason for that: In order to include the month that just ended, with data that could be incomplete, the company throws in an extra month of sales for balance.
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Comments
IMO any data suggesting rises is prices during the tax credit is rubbish and only continues to give hope to those that are living in denial of what the housing market should be.
Living in denial of what will likely happen is a one way ticket to ulcer town.
Posted by: adguy | July 8, 2010 10:37 AM
I wouldn't call it rubbish, adguy, since they did rise (assuming no skewing such as fewer foreclosures selling, which could be an issue). But I would call it "probably temporary," which is what I think you're getting at.
We'll all find out soon, eh?
Posted by: Jamie Smith Hopkins | July 8, 2010 10:46 AM
It's also worth noting that mortgage rates dropped steadily during the report period to a 50-year low.
Posted by: John | July 8, 2010 12:26 PM
I'm so confused! Didn't I just read an article that said that prices in the Baltimore region were up for the month of June?
When are we going to realize that this market is still way over inflated and has nowhere to go but down? I know that no one wants to hear that but lower prices are the only thing that is going bring about equilibrium. I own my home and don't want its value to decline but in a few years I hope to be able to purchase a larger home and if prices go up I'll never be able to afford more house! I don't mind a little depreciation now in order to be able to move up later.
Posted by: Jaded | July 9, 2010 11:21 AM
Hi, Jaded -- MRIS numbers for June just came out this morning, and they show a 5 percent increase in average home prices in the Baltimore metro area compared with a year earlier.
But that's not measuring the same thing as the Clear Capital data, which looked at prices in the past four months (March through June) vs. the previous three months (essentially quarter over quarter, in the tweaked way that the firm does it). Clear Capital also compares same-home sales, not the average of ALL sales. (There's a definite danger of skewing when you average all sales and compare with the average from another period, but that's the only choice we have for the monthly numbers.)
Hope that helps.
Posted by: Jamie Smith Hopkins | July 9, 2010 11:35 AM
Well using my own EXPERT analysis I'm predicting an further 7-10% decline in home prices in the Baltimore metro area.
Posted by: Jaded | July 9, 2010 3:25 PM
Sounds like a poll!
Posted by: Jamie Smith Hopkins | July 9, 2010 3:27 PM
Here you say its falling- then in article you and your paper say it rose in June. Which is the truth?
Posted by: Marc | July 10, 2010 11:39 AM
Both, as far as I can tell, Marc. See my answer to Jaded three comments above yours. (Bottom line: The two reports are measuring different things.)
Posted by: Jamie Smith Hopkins | July 10, 2010 11:58 AM
Jamie -it tells me the media like to put headlines and not find the truth. I think sales have slowed some since the stimulus ended, and values are declining in some areas and stable to slightly increasing in others. No matter, these numbers are the past and no guarantee of a future trend. I think we can agree on that. Thanks for your answer.
Posted by: Marc | July 11, 2010 5:18 PM
Marc, it's often hard to know exactly what's happening until it's several months in the rear-view mirror, sometimes more -- at least when it comes to economic trends. That's the nature of data. I always do my best to point out uncertainties.
As for headlines, they're restricted by limited space and therefore can't pack in all the subtleties of the stories they top. (It's a very hard job to write good headlines. Try it sometime just for fun.) The one on the June home sales story -- "Baltimore-area home prices rise 5% in June / But economists say prices will likely decline again with the end of the homebuyer tax credit" -- does its best, don't you think?
Posted by: Jamie Smith Hopkins | July 11, 2010 9:48 PM