Residential home values experienced a meager 0.2% increase in February with the average sales price coming in at $195,000, according to new figures compiled by Lender Processing Services.
However, this marks the first rise in seasonally adjusted prices since March 2010 and is only the third increase in five years, LPS said.
Even though the Jacksonville, Fla.-based analytics provider is forecasting a 0.3% jump in home values for March, there is still pessimism about the immediate future for housing if sales do not pick up from their current anemic levels.
“Reasons for caution are clear, as we’ve been here before. Nonseasonally adjusted prices increased for a few months in early 2009, 2010 and 2011—trends that all ended by summer, after which all the gains were lost,” said Raj Dosaj, vice president of LPS Applied Analytics.
“As is true this month, those temporary increases were on low sales volumes—about 30% lower than at any point since 1998,” Dosaj added. “Furthermore, the inventory of distressed homes remains high, which will continue to put a drag on prices.”
Price changes during February among metropolitan statistical areas were varied. Of the 585 MSAs covered in the LPS home price index, prices increased for all of the 199 MSAs in 20 states. While average prices did not rise for all MSAs in the remaining states, 334 saw their residential values improve.
Among the MSAs for which both LPS and the Bureau of Labor Statistics provide data, average prices decreased during February for only three California markets: Los Angeles, San Diego and San Francisco.
Meanwhile, four MSAs saw a month-over-month uptick of 1% or more including Honolulu, Seattle, Tampa and Portland, Ore. Pittsburgh is the only city that has seen home values climb continuously since January 2005.
