The Wall Street Journal
By: Nick Timiraos
August 11, 2010
Home prices rose in two-thirds of U.S. metropolitan areas in the second quarter as the expiration of home-buyer tax credits spurred sales, the National Association of Realtors said Wednesday.
Separately, the Obama administration said Wednesday it was making $3 billion in additional aid available to help unemployed homeowners avoid foreclosure, largely for a federal fund that provides grants to state housing agencies.
The median price of existing single-family homes increased in 100 of 155 metropolitan areas tracked by the trade group, compared with 26 markets that saw gains in the year-ago quarter.
The data are the latest sign that the federal tax credits helped stabilize home prices during the first half of the year, even in hard-hit markets in Florida and the Midwest.
But economists have warned that the gains could prove fleeting if a faltering economy saps demand and if the pace of foreclosures rises.
Signs of a slowing market are already evident. Newly signed contracts plunged in May and haven't rebounded since. Those lower sales levels won't be reflected until July because it takes one or two months for sales to close. As inventories of unsold homes rise, many economists see home prices declining later this year.
The national median price for single-family homes rose to $176,900 in the second quarter, up 1.5% from one year earlier, as distressed sales accounted for a smaller share of home sales.
Metro areas that showed the biggest gains from a year earlier included Akron, Ohio (36%), San Jose, Calif. (26%), and San Bernardino, Calif. (18%). Those increases don't necessarily correspond to rising values but instead show that the mix of sales has shifted away from foreclosures selling at fire-sale discounts. Metro areas that showed the biggest declines included Cumberland, Md. (down 15%), Tuscon, Ariz. (down 14%) and Ocala, Fla. (down 13%).
While many of California's hard-hit housing markets have rallied over the past year, bubble markets in Florida haven't fared well. The report showed some bright spots, but others continue to see median values fall.
The report looked at home sales in the April-to-June period, when many home sales were eligible for tax credits worth up to $8,000. To qualify, buyers had to go under contract by April 30.