Cleveland area housing prices up first time in year

Posted by The Lohser Group Cleveland on Thursday, June 26th, 2008 at 9:57am.

Cleveland area housing prices up first time in year

*Compliments of The Plain Dealer 6.24.08.

Home prices in the Cleveland area increased in April for the first time in almost a year, with improvement across all price levels, according to data released Tuesday.

The Standard & Poor's/Case-Shiller home-price index looks at existing single-family homes sold in 20 major markets, including the Cleveland-Elyria-Mentor area.

Nationally, the index dropped 1.4 percent from March to April. But the Cleveland-area index rose 2.9 percent, marking the first month-to-month home price increase here since May of last year -- and the biggest one-month gain in the 20 metro areas.

The index for lower-priced homes in Greater Cleveland rose the most -- 5.9 percent for homes under $114,448. Homes from $114,448 to $182,222 rose 1.4 percent and homes over $182,222, 3.8 percent.

The Cleveland area was one of eight markets that saw higher home prices in April compared with March, though all saw declines compared with the same month a year ago.

"Cleveland is one of the markets that has not suffered from the dramatic highs and the dramatic lows," said Maureen Maitland, a vice president at Standard & Poor's. "Their growth rates have not been as strong, and their decline has not been as strong, either, so it's a much smoother cycle.

"The downside is their overall growth has not matched some of the stronger markets. Cleveland has not appreciated too much above where it was 10 years ago."

The Case-Shiller report shows that Cleveland home prices have risen 9.55 percent since January 2000, lowest of the 20 metro areas except for Detroit, where prices actually have declined since 2000.

Local home values

Cleveland-area housing has appreciated overall by 9.55 percent since January 2000. Higher-priced homes have done the best since 2000.

Over $182,222
Up 12.63 percent.

$114,448 to $182,222
Up 6 percent.

Under $114,448
Down 10.75 percent.

SOURCE: S&P/Case Shiller Home Price Index

Increased home prices from March to April may not mean much, Maitland said. It's typical to see demand and prices rise as the Cleveland snow melts and people start home shopping.

According to statistics last month from the Northern Ohio Regional Multiple Listing Service, the number of single-family homes sold in six Northeast Ohio counties increased by 10.1 percent between March and April.

Carl DeMusz, president and chief executive of the multiple listing service, said this year's spring jump was particularly high and could have contributed to higher prices. But the prices also could reflect fewer sales of foreclosed properties, which banks typically sell at heavy discounts, he said.

"There's a lot of dead wood out there that's starting to disappear," he said.

David Blitzer, chairman of the index committee at S&P, cautioned against being too optimistic.

"I would not declare the whole show over and a great turning point or anything like that," he said -- especially since the Cleveland-area home price index is still down 6.8 percent from where it was a year ago.

Nationally, the 20-market index fell a record 15.3 percent in April compared with the year before. It was the biggest decline since the index began in 2000, topping the 14.4 percent record of March.

The composite was pulled down by markets like Las Vegas and Miami, each of which saw drops of more than 26 percent compared with last April. Those markets had some of the fastest growth in 2004 and 2005, so they had the farthest to fall.

Only six markets had better results than the Cleveland area compared with last year, including Charlotte, N.C., which declined only 0.1 percent.

Barbara Reynolds, president of Real Living Realty One in Cleveland, said she thinks low interest rates and prices have lured buyers back into the Northeast Ohio marketplace. She said she has seen "more people at open houses, more people writing offers and more people looking at properties."

Enzo Perfetto, a spokesman for the Home Builders Association of Greater Cleveland, hopes that increased values and sales of existing homes will lead more people to buy new ones.

"We take reports with a grain of salt," he said. "I think everybody kind of has a cautious eye to the next report, but it's definitely a breath of fresh air to see a report in a positive direction for Cleveland."


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