As we enter the second half of the year, housing seems to have a heartbeat that is separate and distinct from the broader economy. While the stock market has largely retreated due to global economic concerns, home prices indicate that housing may be able to lead the way to recovery. Multiple measures of prices reveal that not only has the housing market stabilized, it has appreciated in many areas.
As of the end of June, preliminary median existing-home prices are up 5 percent year-over-year. Home prices are seasonal and typically the first quarter marks the low point and the third quarter the high. Different types of households buy during different seasons, with the most activity and the largest numbers of expensive homes purchased in the summer. The early summer numbers portend the best summer since 2008.
Existing-home prices are up for the year in 16 of the largest 25 markets. Based on early data for May and June, four of the previously most depressed markets are reporting double-digit increases in the median prices of homes closed. Bidding wars are now the norm in markets such as Orlando, Phoenix, Miami, and Tampa. And the uptrend seems to be accelerating as the second-quarter data show 20 of the largest 25 markets up year-over-year. Nothing boosts consumer confidence in housing and helps stem foreclosures like rising prices.