Optimistic housing prices report, but tempered reaction

Although a national report on home prices for the second quarter was optimistic, some housing analysts tempered their enthusiasm about the housing market’s recovery.

The three composites measured by the Standard & Poor’s/Case-Shiller home price index all increased for the first time since the summer of 2010. The national composite climbed 1.2 percent compared to the second quarter of 2011. The 10-city composite rose 0.1 percent during the same time period, and the 20-city composite edged up 0.5 percent. According to the report, home prices nationally are back to their early 2003 levels. (It is worth noting that condo and co-op prices are not included in this report.)

“Case-Shiller’s June numbers further affirm what other indices have already been showing, namely that the overall market is healing, albeit at a frustratingly slow pace,” Stan Humphries, chief economist at Zillow, said in a statement.

“While we have seen healthy appreciation for the past few months, we do expect declines in the Case-Shiller indices in the back half of this year, particularly as the overall monthly sales volume declines. . . . Overall, the period of sustained home value declines is behind us, however, due to high levels of negative equity and the associated scourge of foreclosures, we’re still a few years away from a normal housing market.”

Case-Shiller’s data only goes through June. As Humphries suggested, prices in the Washington area started to come down in July. According to data from RBIntel, after four months of increases, the average sold price in the region declined 2.27 percent in July from June. The median sold price was down 3.74 percent from June.

Kathy Orton is a reporter and Web editor for the Real Estate section. She covers the Washington metropolitan area housing market.

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