Charlotte home prices increased for the second month in a row, fueling hopes that the local housing market is seeing the beginnings of a recovery, reports the Charlotte Observer. The Standard & Poor’s/Case-Shiller Home Price Index showed Charlotte’s home prices were up 1.6 percent over March and 0.8 percent over April 2011.
Nationally, the index of 20 cities was up 1.3 percent in April over March. It was still down 1.9 percent over last April, but both measures were better than analysts had expected.
“We’re in for a nice, steady, slow, methodical recovery,” said Pat Riley, president and chief operating officer of real estate firm Allen Tate. He said factors have continued to coalesce and spur growth, including rising apartment rents, low interest rates and low inventories. These all provide an outlet for pent-up demand. “There are lots of folks who wanted the dream of homeownership, but it was outside their reach,” he said. “(Now) there’s no way in the world I shouldn’t be buying.”
The Case-Shiller report, while widely watched, lags two months. The index is one of the most precise measures of home values because it tracks repeat sales of houses. Like stock market indexes, Case-Shiller reflects changes in prices, not an actual price. Every city in the index recorded an increase except for Detroit, which saw a drop of 3.6 percent. None of the 20 cities hit new lows in April. San Francisco had the largest increase at 3.4 percent. When the index is seasonally adjusted, prices were actually up for the fifth straight month in April.
Mekael Teshome, an economist with PNC Bank, said the results demonstrate the market has stabilized and is now shifting into a recovery. “I believe the recovery has legs and the increases that we saw in house prices in the last few months were not statistical flukes,” he said, adding that he doesn’t expect foreclosures to derail the recovery because they’re coming back on the market at a pace that’s gradual enough to absorb.
Charlotte is closer to returning to its peak price level than most markets, Teshome said. While Charlotte is down 16 percent from its high in 2007, the rest of the country is down an average of 33 percent from its peak, he said.
“It has been a long time since we enjoyed such broadbased gains,” S&P index committee chairman David M. Blitzer said in a statement. “While one month does not make a trend, particularly during seasonally strong buying months, the combination of rising positive monthly index levels and improving annual returns is a good sign.” He said that while spring and early summer are traditionally the strongest buying months, there was some indication that improving data reflected more than seasonal gains.
Jennifer Frontera, president of the Charlotte Regional Realtor Association, said prices are seasonally expected to go down in the fall, but even small increases for the rest of the year are signs of a recovery. “We had an outstanding January and February, so we’ve just been building momentum,” she said. “We’ve got to keep watching each month.” Read More.