Home prices post biggest gain in 7 years

Buyers compete for limited supply amid spring buying season




Local angle

Clark County home sales showed year-over-year gains in March and April as sellers listed more houses for sale and buyers snapped up the inventory. According to the Portland-based RMLS listing service, 529 home sales closed in April, a 14.8 percent sales increase from March and a 17.9 percent increase over the 400 homes sold in April 2012. April’s median sales price of $215,000 — half sold for more, half for less — was up more than 21 percent from April 2012. The inventory of houses listed for sale tightened in April to a four-month supply, down from 4.4 months’ worth of inventory in March. The number means it would take four months to sell all of the listings if none were added. In the first four months of 2013, there were 1,743 closed home sales, up 17.9 percent from 1,478 closed sales in the same period last year.

Home prices increased by the most in seven years, jumping nearly 11 percent in March, according to data released Tuesday, as buyers continued to compete for a limited supply of homes and the spring buying season kicked off.

Prices rose in all 20 cities tracked by the Standard and Poor’s Case-Shiller index. Phoenix, San Francisco and Las Vegas led the pack, with home prices rising more than 20 percent in each city compared with a year ago.

Nationally, home prices in the first quarter are back to their 2003 levels but remain below their peak levels from 2006, according to the report.

The price increases mean that a housing recovery that began last year is gaining momentum. The cities of Charlotte, N.C.; Los Angeles; Portland; Seattle; and Tampa, Fla., posted their biggest month-over-month gains in more than seven years. The Portland calculations encompass the larger metropolitan area, including Vancouver.

The positive housing data helped lift stocks, which were up more than 1 percent early Tuesday. That was also helped by government data showing that consumer confidence climbed to its highest level in five years, driven by optimism about the economy, according to data released Tuesday morning.

Market conditions were “balanced” a decade ago, and returning to those price levels means the housing market has largely returned to a good place, said Lawrence Yun, chief economist for the National Association of Realtors.

Rising prices are a mixed blessing, he said. They build wealth for homeowners and lift those who owe more than their homes are worth out of negative equity, but discourage new buyers, he said.

“The only people who are not smiling are the buyers,” he said.

The latest figures reflect a housing market that is still grappling with low inventory even as buyers crowd in to make the most of low mortgage rates. New home sales in April increased 29 percent compared with a year ago, while sales of existing homes rose nearly 10 percent, according to data released last week. Housing starts fell 16.5 percent from a month ago, but building permits were up.

New construction is still far below the level it needs to be to alleviate the pressure of high prices, Yun said. Overall, housing remains a strong spot in the economic recovery.

“Without the housing recovery, the U.S. would be on the verge of a recession,” Yun said.

The Los Angeles Times contributed to this story.