Home prices rise in most U.S. cities but unchanged in Las Vegas

WASHINGTON - Home prices rose in March from February in most major U.S. cities for the first time in seven months.

Prices, however, were unchanged in Las Vegas.

The increase is the latest evidence of a slow recovery taking shape in the housing market.

The Standard & Poor's/Case-Shiller home price index shows that prices rose in 12 of the 20 cities it tracks.

Three of the weakest markets showed signs of improvement. Prices rose in Tampa and Miami. The biggest month-to-month increases occurred in Phoenix, Seattle and Dallas. Prices dropped the most in Detroit, Chicago and Atlanta.

Rising prices in most cities add to other encouraging signs of a housing rebound. Sales are up, mortgage rates are at historic lows, builders are more confident and the economy is adding jobs.

Still, even though 12 of 20 cities showed gains, the weaker cities weighed on Case-Shiller's overall price index in March. The index edged down to its lowest level since the housing bubble burst.

At the same time, price declines have slowed, and a majority of markets are rising.

"This is relatively good news," said David Blitzer, chairman of S&P's index committee. "We just need to see it happen in more of the cities and for many months in a row."

In part, the increases reflect the start of the spring selling season. The month-to-month prices aren't adjusted for seasonal factors.

The S&P/Case-Shiller monthly index covers roughly half of U.S. homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The March figures are the latest available.

Las Vegas-based SalesTraq, which reports housing data based on escrow closings recorded through the Clark County Assessor's Office, showed the median existing home price at $107,000 in April, up from $105,000 the previous month and the third straight monthly increase. The price is up 0.5 percent from a year ago.

The mix of distressed properties, including foreclosures and short sales, is likely driving the pricing dynamic, but increased price stability appears to be prevailing, SalesTraq analyst Brian Gordon said.

"Current conditions are translating into increased price stability in selected areas and increased interest in the new construction sector, yet the majority of borrowers remain underwater and a significant number are on the verge of foreclosure," Gordon said.

Roughly 70 percent of Nevada mortgage holders are underwater, owing more than their home is worth, according to CoreLogic. Home prices in Las Vegas are down 60 percent from their peak in 2006.

"Every time I hear things are getting better, I look at the Case-Shiller index going down and shadow inventory going up," said Frank Pallotta, managing partner of Rumson, N.J.-based Loan Value Group.

"How many homes will eventually be sold or held in REO (real estate-owned)? That number I believe is more than 2 million. Obviously, you guys (Nevada) and Florida have the highest concentration of severely underwater homes, so the numbers will be proportionately higher in Nevada, Michigan and Florida," he said.

Over the past 12 months, prices have dropped nationally. But the declines have slowed. The 20-city index was 2.6 percent lower in March than in the same month last year. That's better than the 3.5 percent year-over-year drop in February. And it's the smallest annual drop since December 2010

Other measures of home prices have also improved. But the S&P/Case-Shiller index uses a three-month moving average that could take longer to signal greater improvement.

"It might be the last of the closely followed home price figures to reflect a turning point," said Jonathan Basile, an economist at Credit Suisse.

In April, sales of both previously occupied homes and new homes rose near two-year highs. Builders are gaining more confidence in the market. They're breaking ground on more homes and requesting more permits to build single-family homes later this year.

SalesTraq reported 596 new-home building permits pulled in Las Vegas in April, a 90 percent increase from the same month a year ago. New home sales jumped nearly 40 percent to 351 in April, while existing home sales declined 6.2 percent to 4,713.

Review-Journal writer Hubble Smith contributed to this report.