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Real estate industry

Housing Market Shows Signs of Stabilization, But Recovery Not Yet in Sight

Strategic Insights

— 2 min read

The nation's housing market received positive news with the Case-Shiller index showing a monthly increase in 13 of 20 cities, but market watchers caution that prices are still declining due to foreclosures and rising unemployment. The recent good news comes on the heels of a 11 percent increase in new home sales and a 3.6 percent rise in existing home sales nationally last month. Experts agree that the market is showing signs of stability, but recovery remains uncertain without a broader economic uptick.

Key Takeaways:

  • The Case-Shiller index, which excludes high-end properties and riskier mortgages, showed a 0.5 percent increase in home prices from April to May, but remains 17.1 percent below May last year.
  • 13 of 20 cities tracked by the Case-Shiller index saw a monthly increase in home prices in May.
  • Despite the recent positive sales activity, prices are still declining in many areas due to foreclosures and rising unemployment.
  • Experts warn that the housing market is still in a "washout bottom" phase, where banks and owners finally capitulate and the glut of inventory gets sold off.
  • First-time home buyers and investors are primarily driving activity in the lower end of the market, with properties selling quickly for under $125,000.
  • The Florida Association of Realtors reported stability in local markets, with median sales prices remaining relatively stable.
  • Market watchers predict that prices may go down slightly before rebounding, with some experts predicting a 4-6 percent annual appreciation rate when the market hits bottom.

Statistics:

  • Case-Shiller index rose 0.5 percent from April to May.
  • Case-Shiller index was 17.1 percent below May last year.
  • 13 of 20 cities saw a monthly increase in home prices.
  • New home sales rose by 11 percent in June.
  • Existing home sales rose 3.6 percent nationally last month.
  • Median sales price in Sarasota-Bradenton was $162,700 in June.
  • Median sales price in Charlotte County-North Port was $145,600 in June.
  • Case-Shiller index has lost 32 percent since its peak reading three years ago.
  • Current prices are at mid-2003 levels.

Sources:

  • The nation's housing market got its third dose of good news... by MICHAEL BRAGA and AARON KESSLER, Staff Writers, [no publication date mentioned in the original text]
  • Standard & Poor's/Case-Shiller index, [no date mentioned]
  • Case-Shiller reading follows news on Monday that new home sales rose 11 percent in June, [no publication date mentioned]
  • Florida Association of Realtors, [no date mentioned]
  • Lewis M. Goodkin, founder of Miami-based Goodkin Consulting, [no date mentioned]
  • Jack McCabe, Deerfield Beach-based real estate consultant, [no date mentioned]
  • George Huhn, real estate agent with Coldwell Banker, [no date mentioned]

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