Home Prices Rise

Existing-home sales rose 0.6 percent in April to an annual sales rate of 4.97 million, the highest level since November 2009, the National Association of Realtors reported Wednesday. Economists had expected a 1.6 percent increase to 5.0 million from March’s original report of 4.92 million sales. March sales were adjusted upward to 4.94 million.

The median price of an existing single-family home jumped 11 percent year-over-year to $192,800, the highest since August 2008.

Home prices are rising at the fastest rate in seven years, as buyers are returning to a market where the number of properties for sale is in short supply, the Wall Street Journal reported yesterday. Prices increased 9.3 percent in February from a year earlier while mortgage-interest rates hovered at near record lows in 20 major metropolitan areas.

PRICE CORRECTIONS LEAVE SOME HARD-HIT MARKETS 'UNDERVALUED'

According to Local Market Monitor’s analysis, the 10 most undervalued housing markets in the United States and the percentage by which they are undervalued are:


Merced, California: 32%

Las Vegas-Paradise, Nevada: 27%

Killeen-Temple-Fort Hood, Texas: 25%

Akron, Ohio: 22%

Cleveland-Elyria-Mentor, Ohio: 21%

Warren-Troy-Farmington Hills, Michigan: 21%

Mansfield, Ohio: 20%

McAllen-Edinburg-Mission, Texas: 20%

Reno-Sparks, Nevada: 20%

Stockton, California: 19%

Local Market Monitor’s report looks at 316 U.S. markets. Of those, a total of 40 are considered to be underpriced. At the other end of the spectrum, 18 are described as being overpriced when actual home prices are compared to Local Market Monitor’s equilibrium target. The remaining 258 markets fall into the gray area of 15 percent over/above the equilibrium price, which the company deems to be a “normal” market variation.

The 10 most overvalued housing markets in Local Market Monitor’s report and the percentage by which they are overvalued are:

Atlantic City-Hammonton, New Jersey: 45%

Barnstable Town, Massachusetts: 30%

Nassau-Suffolk, New York: 26%

Asheville, North Carolina: 26%

Portland-Beaverton, Oregon-Washington: 24%

Los Angeles-Long Beach-Glendale, California: 24%

Santa Ana-Anaheim-Irvine, California: 23%

Edison-New Brunswick, New Jersey: 20%

San Jose-Sunnyvale-Santa Clara, California: 19%

Boulder, Colorado: 19%

Fiserv Predicts Home Prices to Drop Another 4.9% in Year Ahead

Despite recent increases in a number of the industry's home price measurements, and even an uptick in the company's own index of residential property prices, Fiserv Inc. says the gains will be short-lived. The information technology firm is forecasting home prices to fall by another 4.9 percent over the next 12 months, as unemployment remains high, mortgage rates rise, and markets such as Florida, Arizona, and Nevada add even more distressed properties to their inventories.

http://www.caseshiller.fiserv.com/shillerdefault.aspx