Seattle-area home prices rise for 2nd straight month in November
Seattle-area home prices rose 0.3 percent on a seasonally adjusted basis in November from October — the second straight monthly gain after 2-1/2 years of declines — according to the Standard & Poor's/Case-Shiller index.
Seattle Times staff and news services
Seattle-area home prices rose on a seasonally adjusted basis in November for the second straight month after 2 ½ years of declines, according to a closely watched index.
The Standard & Poor's/Case-Shiller home-price index for Seattle rose 0.28 percent in November from October after a 0.44 percent bump the previous month. Before then, the index had dropped every month since peaking in May 2007.
The Case-Shiller index tracks home prices in 20 cities. The Seattle market, which includes King, Snohomish and Pierce counties, was one of 14 in which seasonally adjusted prices rose in November.
The composite, 20-city index inched up 0.24 percent, the sixth straight monthly increase. While Seattle prices didn't start rising until more recently, prices here kept climbing for a year after those in most other cities began dropping in 2006.
So some experts have said it is no surprise that Seattle's turnaround also has come later.
The 20-city price index was off 5.3 percent from November of last year, nearly matching analysts' estimates that it would fall by 5.1 percent.
The national index is now up more than 3 percent from its bottom in May, but still 30 percent below its peak in May 2006.
In Seattle, despite the recent increases, the index has dropped 10.6 percent from November 2008, and 22.3 percent from its 2007 peak.
Rising home prices are important to the economic recovery because they make homeowners feel wealthier and lead them to spend more money. Price increases also help restore home equity for the one-in-four homeowners who currently owe more on their mortgages than their homes are worth.
In a research note, Deutsche Bank analyst Joseph LaVorgna wrote that the price improvements should lead to a $1 trillion increase in homeowner equity by the current quarter.
Karl Case, a co-creator of the index, pointed to signs of stability that were in stark contrast to rapidly falling prices a year ago. "Flat is good," he said.
Phoenix and San Francisco posted the highest month-to-month gains, on a seasonally adjusted basis, while New York and Chicago had the largest declines.
The federal tax credit for first-time homebuyers had been scheduled to end Nov. 30, but Congress extended the deadline through April and expanded the program to include a tax credit for current homeowners.
"A lot of people are thinking now is the time to buy because they are going to get a great bargain or a steal," said Bill Wilkerson, a real estate agent with ZIP Realty in Phoenix. "I'm looking forward to a very active springtime."
Prices increased for the seventh straight month in San Francisco, where sales in the $500,000 to $750,000 price range were strong. Buyers took advantage of the tax credits and low interest rates, said Chuck Colliver, president of Century 21 Alliance in Daly City, Calif.
"Those people who have been thinking about buying a house this year are probably going to put it on the front burner" because of the low rates, Colliver said.
In Las Vegas, prices edged up 0.1 percent, the first month-to-month increase since January 2007. Still, prices are down 56 percent in Las Vegas since peaking in April 2006.
The list of cities with price increases, on a seasonally adjusted basis, also included Los Angeles, San Diego, Denver, Boston and Charlotte, N.C.
While prices have risen steadily on a national basis, some economists predict they will dip again early this year because of high unemployment and foreclosures.
"Until we get job growth, we won't get complete healing of the housing market," said Jeff Humphreys, an economist with the University of Georgia.
Data for December and January could show price declines due to a lull in buyer activity after the tax credit was extended, Humphreys said.
UBS analyst David Goldberg estimates that prices could drop 3 to 5 percent more before unemployment levels out, possibly in the second half of this year.
"We're probably in the latter stages of seeing home price declines," Goldberg said.
Home prices fell for the third straight month in Tampa, Fla., where sales of distressed properties comprise about half of total sales, said Cathleen Smith, a regional vice president with Coldwell Banker.
Prices also dropped in Washington, D.C. — which had posted seven straight monthly increases — Miami and Detroit.
Information from Seattle Times business reporter Eric Pryne and The Associated Press is included in this report.