News of broad-based home price increases is starting to trickle in, with this report from Integrated Asset Services showing a 1.6% monthly increase in nationwide single family detached home prices for the month of May. The same survey also showed a small gain in April giving some hope that the increase isn't just a fluke. The IAS pricing index is less closely followed than the National Association of Realtors, FHFA/OFHEO, or Case-Schiller indices, so many observers may wait to see positive trends from those indices before declaring a turnaround. However, given that the IAS index is down 19% from it's peak in 2007 and May's gain is the biggest increase it has seen since July 2005, it is by no means a 'pollyanna' index seeking to provide false-positive news.
For homeowners and sellers in the Philadelphia area, a further silver lining of this report is that the Northeast region far outperformed the rest of the nation, showing a 3.2% month-over-month increase in single family detached home prices from April to May. For buyers in the area this may signal that the days of the buyer's market are numbered as every subsequent report of rising prices will shift bargaining power further and further towards the sellers' side of the equation.
**Even more surprisingly good news: California home prices rose 7% in June according to this article! Califonia led prices down and maybe it will take the lead in heading back up. Let's hope there aren't too many more 7% monthly jumps though, that sounds like another bubble waiting to happen. Thankfully the price increase is largely fueled by a shift from distressed sales back to traditional transactions which typically trade at a higher price - better than a optimism/hubris fueled price jump.
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