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Washington • Home prices in most major U.S. cities are rising for the first time in eight months, boosted by an annual wave of spring buying. Analysts cautioned that the increases may be temporary and don't signal a rebound for the depressed home market.
Prices rose in 13 of the 20 cities tracked by the Standard & Poor's/Case-Shiller home-price index, according to the April report released Tuesday. The sharpest increases were in Washington, D.C. The next-largest were in San Francisco, Atlanta and Seattle. (Salt Lake City is not in the index.)
The index covers metro areas that together make up about 50 percent of U.S. households. It measures sale prices of select homes in those cities, compared with prices in January 2000. It then provides a three-month average. The April data is the latest available.
Last year, a tax credit for first-time buyers helped boost prices. They rose nearly 4 percent from April through July before falling more than 7 percent this winter to record lows. Prices in the largest metros sank in March to their lowest levels since 2002.
The 0.7 percent increase in April was the first increase since July. The positive data came with a caveat. The figures weren't adjusted for seasonal factors, such as the buying that normally picks up in spring. Once the numbers are adjusted, prices actually fell in April.
David Blitzer, chairman of S&P's index committee, said the rise in the index was a "welcome shift from recent months." But he noted that much of the improvement was likely due to the start of the buying season.
One bright spot was that even when adjusted for seasonal factors, prices rose in some markets that had been pummeled by slumping sales Atlanta, Minneapolis, Phoenix and Portland, Ore.
On the other hand, prices in six areas have reached their lowest levels in nearly four years Charlotte, N.C.; Chicago; Detroit; Las Vegas; Miami; and Tampa, Fla.
In Atlanta, more than a quarter of homes sold in the past year were discounted. They sold for an average of 9 percent less than they'd been listed, according to data analyzed by the housing website Trulia.com.
Analysts noted that both buyers and sellers are reluctant to reach deals in the face of widespread price declines. And nearly 2 million foreclosures could hit the market over the next two years. Many foreclosures have been delayed while federal regulators, state attorneys general and banks review how those foreclosures were carried out over the past two years.
It means foreclosures will occur later and will do damage when they hit. Homes in foreclosure sell at a 20 percent discount, on average, which can hurt prices throughout neighborhoods. The clearest sign that the home market is on its way to a recovery, Alpert said, would be if prices rise through the next few months.
Behind the numbers
Prices rise • Although home prices in most major U.S. cities rose in April, the increases may be temporary.
Ups and downs • The sharpest increases were in Washington, D.C., followed by San Francisco, Atlanta and Seattle. But six areas hit their lowest levels in nearly four years: Charlotte, N.C.; Chicago; Detroit; Las Vegas; Miami; and Tampa, Fla.
Too soon • David Blitzer, chairman of the Standard & Poor's/Case-Shiller home-price index committee, noted that it is "much too early to tell if this is a turning point."