Last Updated May 12, 2010 9:13 PM EDT
First off, house prices rose in many areas of the country, helped along the expiring first-time homebuyer tax credit, according to real estate price statistics released yesterday by the National Association of Realtors (of which I'm a member). In 91 of the 152 metro areas tracked, prices rose in the first quarter of 2010 compared to a year ago. Sales volume, meanwhile, came in at a seasonally adjusted annual rate of 5.14 million.
Home sales are typically seasonally adjusted to smooth out data that is weaker in the winter and stronger in the spring.
The second piece of good news: mortgage data tracker CoreLogic just noted that the number of homes with negative equity is falling, down .1 million from the prior quarter to 11.2 million.
Austin Kilgore of Housing Wire had one of the best dissections of the underwater numbers. He noted that the five hardest-hit states, the four that Michael Lewis calls the "sand states" (Arizona, California, Florida, and Nevada) plus Michigan, comprised a large percentage of negative equity borrowers in the last quarter of 2009 and still do. In the fourth quarter of 2009, 42 percent of borrowers in those states were underwater, compared with only 15 percent of borrowers in the other 45 states, Kilgore noted. Not much has changed. In the first quarter of 2010, 70 percent of the borrowers in Nevada are underwater, according to CoreLogic.
Remember that these numbers sound like an overstatement, because they're based on the universe of mortgage borrowers, which represent some 47 million homes. But another 25 million or so homes have no mortgage at all. (If you want to geek out, blogger NJ HELOC Heaven has an interesting discussion of the "homes without mortgages" point.)
Bearing all this in mind, the question is not "How quickly can home prices rise nationally?" but "How quickly can home prices rise in Arizona/California/Florida/Michigan/Nevada"?
And according to the NAR data, those areas are still bottoming out. California appears to be recovering, with Los Angeles/Long Beach/Santa Ana up 9.2 percent, and Riverside/San Bernardino/Ontario up 4.6 percent. Phoenix/Mesa/Scottsdale is also recovering, with a 9 percent increase in home prices from the spring of 2009.
However, Miami/Fort Lauderdale/Miami Beach is down 6 percent, Las Vegas/Paradise is down 11.8 percent, and Reno/Sparks is down 13.5 percent. A little turnaround in those areas -- a little firming up of the sand under those castles, if you will -- and the number of homes underwater should show a real and drastic improvement.