3 year drop in home prices appears to be at end.

According to recent reports and forecasts by housing analysts, the three-year descent in home prices
appears to be at an end. Eight cities, including San Francisco, showed price increases in May, up from four
in April, and one in March, according to Standard and Poor’s/Case-Shiller Index. For the first time since
early 2007, the index of 20 major cities was virtually flat, rather than down.
KEEP THIS IN MIND
• Earlier reports show that sales of existing homes nationwide rose last month for the third
consecutive month, while sales of new homes increased in June by the largest percentage in eight
years, according to the NATIONAL ASSOCIATION OF REALTORS® (NAR) and the U.S.
Commerce Dept., respectively.
• Although some skeptics believe the market is pausing before home prices decline further, the
median price in California’s housing market appears to be stabilizing. June marked the fourth
consecutive month of rising home prices and the second largest gain on record for the month of
June, based on statistics dating back to 1979. The year-to-year decline in June also was the
smallest in the past 16 months.
• The S&P/Case-Shiller price index for 20 cities showed a half-percent gain when May was
compared with April. It was the first month-over-month increase in the index in 34 months. “It is
very possible that years from now we will say that April 2009 was the trough in home prices,” said
Maureen Maitland, vice president for index services at Standard & Poor’s.
• One explanation for the increase in median prices is the rise in demand from buyers, especially first
timers taking advantage of the $8,000 federal tax credit, which expires in December. The
NATIONAL ASSOCIATION OF REALTORS® (NAR) is lobbying for the tax credit to be extended
and to be replaced with a $15,000 credit for all buyers.
• Another factor in the market’s resurgence is the prevalence of foreclosures, which make up about a
third of all existing home sales. “Although another surge of foreclosures is expected later this year,
demand remains strong, so the market may be able to absorb more distressed properties without
significantly impacting the median price,” said C.A.R.’s Chief Economist Leslie Appleton-Young.
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http://www.nytimes.com/2009/07/29/business/economy/29housing.html?_r=1&ref=business