Three separate reports on the U.S. and Charlotte housing markets released this week show that while there are encouraging signs, the markets continue to struggle.
The strain could be especially pronounced in the Charlotte region, where the Standard & Poors/Case-Shiller Home Price Index shows sale prices of existing homes reached new lows in February.
A second report, from online real estate research firm Zillow, predicts Charlotte prices will fall farther in 2013, even as prices bottom out this year in nearly two dozen other U.S. cities. The third report, from the U.S. Commerce Department, shows sales of new homes fell nationwide but rose slightly in the South.
Despite the seemingly mixed picture of the markets health, one economist believes the Charlotte market has already seen the worst and is largely on the mend. The housing market seems to have a multiple-personality disorder, Wells Fargo senior economist Mark Vitner said.
I think Charlottes in better shape than other markets, he said. That doesnt mean we wont see another down month every now and then, but it looks to me we bottomed out a year ago.
Nationally, home prices in the 20 cities tracked by Case-Shiller fell 3.5 percent in February from the prior year, slightly better than the 3.9 percent drop reported for January.
Charlotte-area prices dropped 1.8 percent between February 2011 and February 2012, and fell 0.4 percent from January to February. The index was unable to publish January statistics for Charlotte last month because of delays in reporting by Mecklenburg County. On Tuesday, the index said it had received the necessary data.
The unfortunate news is that it confirms that Charlotte is one of the cities that is still reaching new lows, said David Blitzer, chairman of the Index Committee at S&P Indices. Charlotte was one of nine cities posting new lows since the housing markets peak in 2006, joining Atlanta, Chicago, Cleveland, Las Vegas, New York, Portland, Seattle and Tampa.
The index, which tracks repeat sales, shows five cities Denver, Detroit, Miami, Minneapolis and Phoenix posted positive returns.
While there might be pieces of good news in this report, such as some improvement in many annual rates of return, February 2012 data confirm that, broadly speaking, home prices continued to decline in the early months of the year, Blitzer said in a statement.
The Zillow report, to be issued Wednesday morning, also took a somber view of Charlotte-area home prices, predicting they will depreciate 0.5 percent by March 2013. The report expects housing markets in 19 of the 30 cities it covers to bottom out by the end of this year.
Two metropolitan areas, Phoenix and Miami, may see values rise by 6.5 percent and 5.6 percent respectively during the next 12 months, Zillow says. On average, the firm expects U.S. home prices to remain nearly flat or fall 0.4 percent during the year.
For people who have been waiting to time their home purchase close to market bottom, its time to start shopping, said Zillow Chief Economist Stan Humphries. From an economic perspective, the latter part of the first quarter is full of positive news as the spring selling season gets underway. ...It is undeniable that we are seeing sparks of life in the housing market.
New-home sales less rosy
Still, sales of new homes fell in March by the largest amount in over a year, according to the Commerce Department. This follows a 7.3 percent increase in February. In the Commerce Department report, the West saw the sharpest drop in new-home sales, at 27 percent. Sales of new homes rose in the South, climbing 3.1 percent.
Some analysts had expected the index to show overall U.S. home prices rising slightly as bright spots have emerged.
Vitner said new-home sales were better than he expected. He attributed the March drop in part to the unseasonably warm weather which may have caused people to start buying homes earlier than usual. He also said that while some local areas remain hard hit with foreclosures, the distress is now concentrated in pockets and doesnt affect the broader market as much as it once did.
Nationally and locally, inventories of homes for sale are falling, as is the percentage of sales involving foreclosed homes. In Charlotte, February sales jumped 21.8 percent from the previous year, according to the Charlotte Regional Realtor Association.
About 15 percent of Charlotte-area sales in March involved foreclosures, down from 20 percent in March 2011, according to Zillow. Nationally, about 20 percent of sales involved foreclosures.
The bottom line is the Charlotte market is doing a little better, Vitner said. Its been doing horrible for the past couple of years, and now its doing a little better.