Do You Feel Richer? Home Prices Actually Rise

Home prices nationally actually increased by 2.9% in the second quarter of 2009 as compared with the first quarter of 2009. Yes, you read that right. Increased 2.9%. This is the first quarter over quarter increase in the S&P/Case-Shiller report in three years, and offers the strongest signal yet that the market might be stabilizing. Now before you go out and buy that new car thanks to your new-found equity, the report also showed that compared to the second quarter of 2008 home prices are down nationally by 14.9%. But we’ll take it.

This reflects the trend of increased sales activity in the housing market recently, and will hopefully help slow the declines we have seen in housing prices over the past few years. While activity has increased dramatically in most local markets, there is still downward pressure on the median price as most of the activity is in the lower price ranges. But with multiple offers common on the lower end of the price spectrum, it is inevitable that we see some stabilization of prices. Here is a graph of the Median Price per Sq Ft for the Tri-Valley cities of Pleasanton, Dublin, San Ramon, and Danville.

This Fall promises to be very interesting locally. Will inventory remain low? Will sales activity slow down? Will prices continue to stabilize? Will interest rates rise? I guess we’ll see…