Area home prices increased 9 percent in August from a year ago, but a recent survey of analysts shows waning optimism in the prospects for gains through the end of the year.
For the four months ending in August, prices were 9.3 percent higher than they were a year ago, compared with a 6.1 percent gain nationally, according to the report released Thursday by the real estate analysis company Clear Capital.
“I think the bottom line is we’re still seeing price gains overall,” said Alex Villacorta, senior statistician for Clear Capital.
The price gains, though, have softened from a 6.8 percent gain through May, an 8.8 percent gain through June, and an 8.1 percent gain through July.
“As we head into the final months of the year it will be interesting to see how markets respond to an environment without any buyer incentives,” said Villacorta.
While the D.C. area market has weathered the recession better than other places, there was definitely a significant run-up in prices during the boom and a 42 percent price drop from peak to trough – a drop that should not be taken lightly, said Villacorta. The first quarter of 2009 was the low point of the housing downturn, he said.
Markets that had high price gains in the most recent report include Cleveland, with a 34.9 percent increase, as well as Detroit, Minneapolis, Milwaukee, Louisville, Ky., and Pittsburgh.
With lower prices, markets in the Midwest and the South had much more volatility and a greater percent change in prices, compared with the D.C. area where the median price is over $300,000, Villacorta said.
In light of all that, a 7.7 percent quarter-over-quarter price gain for D.C. was “very impressive,” he said.
But analysts remain wary of prospects for the housing market in the still-struggling economy.
The August MacroMarkets survey of 107 real estate analysts, economists, and investment and market strategists showed weakened confidence in the U.S. housing recovery, with just 21 percent of the panelists predicting price gains this year, according to Robert Shiller, MacroMarkets co-founder and chief economist.
The average year-over-year price decline forecast for 2010 has swelled from -0.36 percent in May to -2.08 percent in the most recent survey last month.
