Friday, July 29, 2011

Review of recent home price data

Here at the Division of Housing blog we follow several different measures of home prices. Here is a summary of recent reports:

The National Association of Realtors releases a monthly report on median home prices and transactions. The report only covers the western US as a region and does not have specifics for Colorado or the Denver area. The most recent report is through June, and shows prices increasing 9.5 percent in the west, year over year. The May data showed prices falling 12.6 percent, year over year, for that month.

The Colorado Association of Realtors released median home price data specific to Colorado and many of its regions. The CAR data for May showed the median price down 10.4 percent in May, year over year. In Denver metro, the price was down 3.2 percent.

Case-Shiller has released its home price index for May (actually a 3-month average through May). The data is for the Denver metro area only. Its index shows Denver prices down by 3.3 percent.

Corelogic released home price data specific to both Colorado and the Denver area. Corelogic reported most recently that in May, home prices decreased 3.9 percent in Colorado and 3.6 percent in the Denver area.

The Federal Housing and Finance Agency, which is focused on GSE-related transactions, reported regional data for May in which the Mountain region, including Colorado, posted a home price decline of 9 percent. FHFA also released regional data which has data specific to Colorado and all Colorado metro areas. The second Q report through June is not yet available, although the 1st Q report reported that Colorado experienced a price drop of 6.3 percent, with Denver metro prices dropping 1.6 percent.

All price measures reported here showed year-over-year declines in home prices in Colorado and metro Denver for May. The one measure providing June data, NAR's existing home sales report, showed a price gain of 9.5 percent for the region. How much this regional number applies to Colorado remains to be seen. The data is overwhelmingly in favor of a price drop from May 2010 to May 2011, but June may show increases. In fact, the aftermath of the home buyer tax credits points toward a year-over-year gain for prices in June and during the summer. Since demand dropped off so significantly immediately following the end of the tax credits, it stands to reason that home prices would be depressed following the end of the tax credit (i.e., during Summer 2010) and that a year-over-year comparison between this summer and last summer would then likely produce a percentage change in positive territory. Whether or not this would signal a price increase in the larger economic context may not be clear until the fall.