Housing values continue to rebound

The nation’s housing market is continuing its resurrection, with data released Tuesday showing that prices are up, the number of distressed properties is down and new home sales remain far above last year’s pace.

Home prices rose in January at the fastest annual rate since just before the housing bubble burst in 2006, according to the S&P/Case-Shiller Home Price Indices.

The 20-city home price index, a key gauge of U.S. home prices, climbed 8.1 percent in the 12-month period that ended in January. The healthiest gains were in parts of the country hardest hit by the housing downturn. Prices in Phoenix were up 23.2 percent. San Francisco home prices were up 17.5 percent. Prices increased 15.3 percent in Las Vegas and 10.8 percent in Miami.

In the Washington area, which mostly escaped the worst of the housing price collapse, prices were up 5.9 percent in January, compared with a year ago.

“Economic data continue to support the housing recovery,” said David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices. “Single-family home building permits and housing starts posted double-digit year-over-year increases in February 2013. Despite a slight uptick in foreclosure filings, numbers are still down 25 percent year-over-year.”


New home sales decline, but up from a year ago. (The Washington Post/Source: Census Bureau)

Rising home prices have been accompanied by a steady decline in the number of distressed properties that have yet to hit the market but nonetheless dampen home values.

The so-called shadow inventory is down 28 percent from its January 2010 peak, according to a new report from CoreLogic, a residential property information firm. The number of homes owned by mortgage servicers, in foreclosure or with mortgages that are seriously delinquent is 2.6 million, according to the report.

“The shadow inventory continued to drop at double the rate in January from prior-year levels. At this point in the recovery, we are seeing healthy reductions across much of the nation,” said Anand Nallathambi, CoreLogic’s president and chief executive.

Sales of new homes declined in February after reaching the highest level in more than four years in January, the Census Bureau and the Department of Housing and Urban Development jointly reported.

Sales of new homes dropped to a seasonally adjusted annual rate of 411,000 in February. That marked a 4.6 percent decline from the previous month. Despite the month-to-month downtick, sales were 12.3 percent higher than a year ago.

The growing strength of the housing market is beginning to feed the economic recovery, after years of slowing it. Still, the housing market remains far from peak strength. Despite rock-bottom interest rates and relatively low prices, new home sales remain far off the 700,000 annual rate that economists consider to be healthy.

Even with the recent price gains, home values are at their 2003 level, which is nearly 30 percent below their pre-recession peak.

The figures vary widely across the country.

Homes in Denver and Dallas — two cities that were not heavily affected by the boom — are about 4.5 percent below their peak levels, Blitzer said in a blog post. Other cities are in far worse shape: Home values in Phoenix are 44 below their peak, and in Las Vegas, they remain 55 below their 2006 highs, he said.

Michael A. Fletcher is a national economics correspondent, writing about unemployment, state and municipal debt, the evolving job market and the auto industry.
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