May housing index up, follows trend

By Michelle E. Shaw

The Atlanta Journal-Constitution

For the second month in a row, the S&P Case-Shiller Index for metro Atlanta shows both month-to-month and year-over-year increases in seasonally adjusted home sale prices.

The May index rose 1.7 percent increase from the same period the year before and 1.1 percent from April 2010. Nationally, the 20-city Case-Shiller Index showed seasonally adjusted prices up almost .5 percent in May from April, while up 4.6 percent from May 2009.

Is this good news?

Yes. The positive year-over-year change is a welcome sight, especially for the second month in a row. The April improvement was the first the Atlanta index had seen since September 2007. And like April’s data, if the index stays flat month-to-month in June, the year-to-year gains would develop into a three month trend.

The index suggests sale prices are back to levels last seen in February 2009. It should be noted that in February 2009, prices hadn’t been that low since April 2001.

Any surprises?

No. The National Association of Realtors' May data, released last month, suggested there would likely be an uptick. The Realtors' results are based on closings during a given month and produce a median price.

The Case-Shiller data is two months behind, but is a widely watched measure of home price trends. Case-Shiller follows properties sold over time, rather than individual home sales, and measures value from a baseline in 2000. Both reports track existing homes.

The surprise could be next in next month’s release, as the Realtors’ data has foreshadowed there could be a decline in the index, since buyers no longer get the federal housing income tax credit.

What's next?

On Aug. 11, the Realtors will release their second quarter Metro Home Prices report. In the first three months of the year, home prices rose in a majority of metro areas across the U.S. in the first quarter, but not in metro Atlanta. The tax credit, still in effect during the second quarter, should give the area a boost this quarter, real estate experts say.