Home Price Data Mixed - Up for the Year, Down for the Month

Home prices in February dipped from the previous month but were higher than year-ago levels for the first time since December 2006, according to industry data released Tuesday. The dichotomy candidly illustrates the give-and-take of the nation’s slowly developing housing recovery.

From January to February, prices dipped 0.9 percent in the 20-city composite of the latest S&P/Case-Shiller Home Price Indices. The 10-city composite reading was down 0.6 percent for the month. The declines were worse than analysts and the markets were expecting. A Reuters survey projected just a 0.3 percent drop.

San Diego was the only market that continued to show improvement in home prices between January and February. All other metros and the two composites showed declines from their January levels, some of these being fairly significant, S&P said.

Prices in 12 of the metro areas tracked fell by at least 1.0 percent during the month. Six of these – Charlotte, Las

Vegas, New York, Portland, Seattle, and Tampa – posted new index lows for the current housing cycle where.

The year-over-year results, though, are more upbeat. For the first time in more than three years, the annual rates of change for the two composites are positive. S&P’s 10-city index is up 1.4 percent from February 2009. The 20-city measurement is up 0.6 percent.

While 11 cities saw year-over-year declines, 18 of the 20 metros followed showed an improvement in their annual price changes compared to their January 2010 readings. Dallas and Portland were the only two exceptions.

According to David M. Blitzer, chairman of the Index Committee at Standard & Poor’s, the data point to a risk that home prices could decline further before experiencing any sustained gains.

“While the year-over-year data continued to improve…this simply confirms that the pace of decline is less severe than a year ago. It is too early to say that the housing market is recovering,” Blitzer said.

Blitzer says the homebuyer tax credit has generated encouraging numbers when looking at the March statistics for home sales and inventories, and may also flow through to the company’s home price data in the next few months.

However, “Amidst all the news,” Blitzer said, “we should also pay heed to foreclosure activity, which have reached their highest level in at least the last five years. As these homes are put up for sales, we may see some further dampening in home prices.”

Analysts at the research firm IHS Global Insight say they expect the housing glut and foreclosures to drive prices down another 3 to 5 percent.

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