Home prices in 20 major U.S. cities gained in May, according to data released Tuesday, boosted by the effects of federal tax credits that have now expired.
Prices of previously owned single-family homes rose 4.6% in May compared with May 2009, according to the Standard & Poor’s/Case-Shiller index of 20 metropolitan areas, a closely watched index of home prices. The 20-city index was also up 1.3% from April.
Experts warned that the jump in prices is not likely to last given that what was driving much of the market in the spring were tax credits offering up to $8,000 for certain buyers. They expired April 30. Because the index combines data from three months’ worth of sales, including May, it probably captured the run-up in homebuyer demand.
“While May’s report on its own looks somewhat positive, a broader look at home price levels over the past year still do not indicate that the housing market is in any form of sustained recovery,” said David M. Blitzer, chairman of the index committee at Standard & Poor’s. “Since reaching its recent trough in April 2009, the housing market has really only stabilized at this lower level.”
Prices in California cities continued to appreciate on a month-over-month basis, the non-seasonally adjusted index shows, with Los Angeles up 1.7%, San Diego up 1.1% and San Francisco up 1.7%.
Other cities that gained in May included Atlanta, 2%; Boston, 1.6% and Dallas, 1.5%. Las Vegas fell 0.5%.
Adjusted for seasonal variations, the 20-city Case-Shiller index was up 0.5%. But Standard & Poor’s has warned that the index’s adjusted version is no longer a reliable gauge of prices because of distortions caused by the economic crisis.
From L.A. Times
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