April 26, 2011 (Chris Moore)
Home prices in February hit their lowest mark since March of 2003 according to RadarLogic’s February 2011 RPX Monthly Housing Market Report. Tracking home prices in 25 metropolitan areas, the RPX Composite price fell to $178.12 per square foot in February, which is 36 percent lower than the all-time high of $278.32 per square foot on June 8, 2007.
RadarLogic utilizes a price per square foot metric for analyzing housing markets because it significantly reduces the influence of property size in overall housing pricing trends, which they feel can skew results.
Although the RPX Composite suggests that home prices may rise in the coming months with the onset of the spring buying season, RadarLogic says the housing market faces serious challenges due to an oversupply of homes on the market. This not only includes current housing inventory, but also foreclosures owned by banks and homes currently in the foreclosure process, which they predict will most likely prolong the period of oversupply.
Overall, prices are expected to remain below 2010 levels although there may be short-term seasonal gains.
“The current data suggest a continuing weak environment driven by too much supply and too few buyers. While we suspect it is harder to get a mortgage than it used to be, we also suspect the real problem is too few people want to, ”according to Michael Feder, Radar Logic’s CEO. “A house is not currently viewed as the safe investment it once was. When this psychology reverses, we will see a recovery. But that may not be for some time.”
The RPX Composite also reports that home sales in the 25 metropolitan areas increased 15.9 percent from January to February, however, year-over-year sales were still down by 1.2 percent.
More distressed properties were sold in February 2011 as 36 percent of all homes sold fell into that category. That compares to 30 percent in February 2010. The percentage of homes sold that were distressed properties were the highest amount in two years.
Tags: RadarLogic, RPX Composite, Monthly Housing Market Report, metropolitan areas, housing market, housing prices, home prices, oversupply, mortgage, home sales, distressed properties