Only one market among the 20 tracked by the S&P/Case-Shiller index released today reported positive price growth in the first quarter.
This honor went to Washington DC, a market that’s different from others in some ways and similar in others. In the first quarter, the Case-Shiller Home Price Index rose 1.1 percent in the DC market over a year ago, while the index fell on a national basis by 5.1 percent from the first quarter of 2010.
Moreover, DC’s front runner position seems to be continuing in recent weeks. According to pending sales data from the region’s multiple listing service, Metropolitan Regional Information System, suggest prices are stable. Prices on closed sales in April are even slightly up over April 2010, which was the peak of the tax credit boomlet, and demand remains strong at only 78 median days on market in April.
DC’s stability comes down to two essential factors that are the key to recovery everywhere, according to housing market expert Jonathan Miller of Miller Samuel and John Heithaus of MRIS. The first is employment, where the DC region shines. In February, DC registered the lowest jobless rates among all MSAs in the country, at 5.9 percent, according to the Bureau of Labor Statistics.
The second factor might be less tangible but equally important. “Legacy issues,” as Miller called them, have helped the DC market avoid problems with oversupply, speculation and rampant foreclosures that have plagued other markets.
“Every market is different,” said Heithaus, “and Washington is not a leading indicator for other markets. Each will recover in its own way.”
One of Washington’s secrets is that it is a great relocation market, and the relo market is coming to life as employers offer relocation benefits to entice talented workers to the region. “Employers are paying benefits including closing costs,” he said.
Nationally, the U.S. National Home Price Index declined by 4.2% in the first quarter of 2011, after falling 3.6 percent during the fourth quarter of 2010. The National Index has fallen 5.1 percent over the past year, pushing home prices back to their mid-2002 levels.
With an index value of 138.16, the 20-City Composite fell below its earlier reported April 2009 low of 139.26 - confirming an official double dip in U.S. home prices.