After nine consecutive monthly declines, the Altos Research 10-City Composite Index posted its first positive reading in May 2010. Remaining positive, however, proved to be unsustainable, as the Index retreated to a flat reading in June.
June 2010 Market Highlights
- The Altos Research 10-City Composite Price Index was flat in June and up just 0.2% during the second quarter of 2010.
- The Composite - which had shown sequential monthly declines for the past nine months - posted a positive reading during May but was unable to sustain the monthly increase in June.
- Asking prices rose in 13 of 26 major markets. San Francisco experienced the sharpest increase in June with prices rising 2.0%.
- Listed property inventory jumped in 25 of 26 markets tracked. Inventory increased at the fastest rate in San Francisco and Washington, D.C., up 7.6% and 7.1% respectively during June. During the second quarter, inventory increased by a relatively restrained 5.4% across the Altos Research 10-City Index markets.
- As of mid-July housing inventory levels are rising significantly, where last year at this time inventory was contracting.
- Housing demand has declined as a result of the end of the federal government’s tax credit, inventory is climbing and the effect on prices appears to just begun.
June 2010 Housing Price Trends
The 10-City Composite Index was flat during the month of June and up just 0.2% during the second quarter of 2010. The Composite Index effectively bottomed out in January 2009 at $470,017, climbed throughout the first half of 2009 to $509,030 in July before returning to a gradual downward trend. The Index stood at $477,937 as of June 2010 reflecting a decline of 6.1% from its 2009 summer high.
The market has been heavily influenced by historically low mortgage rates and by the federal government’s home buyer tax credit. The tax credit applied to homes under contract by the end of April and closed by the end of June, although there have been some efforts in Congress to extend it once again. The tax credit may have pulled some housing demand forward but restrained increases in housing inventory appear to have muted the effect on prices of any drop-off in demand so far.
During June listing prices increased in 13 of 26 major markets, were flat in two and declined in 11 markets. The Bay Area markets of San Francisco and San Jose experienced the sharpest increases in June with prices rising 2.0% and 1.5% respectively. The Bay Area markets also showed the largest increases during the second quarter with San Francisco up 4.4% and San Jose up 2.5%.
The weakest markets were Phoenix and Miami with listing prices falling by 2.4% and 2.3% respectively during June. These markets also showed the largest declines for the second quarter with prices off 3.9% in Phoenix and 4.0% in Miami.
June 2010 Housing Supply Trends
During June, the inventory of properties listed for sale rose by 2.8% across the 10-City Composite Index markets. During the second quarter, inventory increased by a relatively modest 5.4%. Inventory increased in all major markets with the exception of Chicago where it fell by a nominal 0.1%. Nationally inventory is 10% lower than this time in 2009, though climbing rapidly into the summer.
Inventory increased at the fastest rate in San Francisco and Washington, D.C., up 7.6% and 7.1% respectively during June. During the second quarter listed property counts increased by 13.5% and 10.1% in the San Francisco and Washington, D.C. markets. Recent price increases in the San Francisco market appear to have drawn more sellers into the market.
Methodology
The Altos Research Real-Time Housing Report provides data on current housing market conditions in major markets around the country. Unlike other data sources that lag several months behind the market, this report summarizes metrics associated with active residential property listings to present the only real-time view of the housing market.
Each “market” measured in this report is equivalent to the Census Bureau's Metropolitan Statistical Area (MSA) dominated by the city listed. Properties analyzed in this data included repeat sales of single-family homes. Condominiums and town homes are not included in the data set. New construction is not included in the data set. The Altos Research Price Index is a statistical compilation of property prices highly correlated with the S&P/Case Shiller® Index. The Altos 10-City Composite is based on single family homes in Boston, Chicago, New York, Los Angeles, San Diego, San Francisco, Miami, Las Vegas , Washington D.C, Denver.
Lexington is very pleased to be able to bring the Altos Research Real Time Housing Market Update to press for the benefit of our customers, partners and readers, and we are always grateful to Altos Research for providing outstanding market information and analysis. For more information visit ALTOS RESEARCH