Home prices rose for the second quarter this year, according to Freddie Mac, buttressing data suggesting that the nation’s housing market is warming up.
Its home-price-growth index rose 0.9 percent in the third quarter, following an upwardly revised 2 percent pickup in the second quarter. The increases of the past two quarters made up for about two-fifths of the declines registered during the final quarter of 2008 and the first quarter of 2009. U.S. home-sale prices were down 3.9 percent year-over-year. Commented Freddie Mac Chief Economist Frank Nothaft:
“The home-price gains of the past two quarters reflect improving existing home sales over that period. Sales volume was up 15 percent between the first and third quarters of this year.
“The lowest average fixed-rate mortgage rates in a half-century, lower house prices, incentives to encourage first-time buyers, and loan modification efforts to stem foreclosures have worked together to support sales and reduce the inventory of unsold homes. Moreover, the price gains were broad-based with increases in seven of nine regions during the third quarter and all nine regions up from their first quarter values.
“Prices are still down relative to their peaks in most markets. . . [V]alues in the New England, East North Central and Pacific divisions are at 2004 levels, on average, and the South Atlantic, West North Central, and Mountain states’ home values are at 2005 levels. In contrast, average values in the West South Central area have tied their previous peak from the third quarter of 2008, while average home values in the Middle Atlantic and East South Central states have reached 2006 and 2007 levels, respectively. “
In New York City, third-quarter reports showed that the market clearly gained strength. The question at the time the reports were issued has been whether that level of recovery would endure.
From what I have been seeing–of course, mere anecdote–the Manhattan housing market in the fourth quarter has started to firm up. I’m asked daily whether I think prices are stabilizing, and I’m beginning to think they are, especially at lower price points.
Escorting buyers of mine to Sunday open houses of one-bedroom apartments on both the Upper East Side and Upper West Side, I was struck by how many sellers were listing their apartments for reasonable prices.
In an earlier post, I noted how another buyer of mine lost a four-way bidding war, proving two things: When a property is priced to sell, it will do so, and that buyers are climbing off the fence.
As I have written before, however, there remain numerous imponderables. But I’m feeling cautiously optimistic. Today.
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022