Homes Prices Up 4.2 percent in US, 7.3 percent in Washington Area.
Prices for single-family homes in major US cities rose a modest 4.2 percent in June from a year earlier, but economists cautioned that the bounce was likely due to a now-expired home-buyer tax credit and that prices would likely fall, perhaps dramatically, in the coming months. Of the 20 US metropolitan areas covered by the S&P/Case-Shiller home price index, prices improved in 15 on a year-over-year basis. San Francisco led those with gains with a 14.3 percent jump, followed by San Diego with 11.2 percent growth, Minneapolis with a 10.7 percent increase. Prices in the Washington area were up a 7.3 percent. Las Vegas, where foreclosure signs were seen in practically every neighborhood during the worst of the crisis, remained weak, with prices down 5.2 percent. Prices in Charlotte, Seattle, Tampa and Chicago also fell. The unexpectedly high increase overall was good news - economists surveyed by Bloomberg News had expected a 3.5 percent advance - but worries about the nation's housing sector are far from over. Because the Case-Shiller index measures repeat sales of homes in a rolling three-month average, the June data captured some transactions in April and May that were covered by the tax credit. "The report shows the ship is dead in the water now that the homebuyer tax credits have expired," Mitchell Hochberg, a principal with Madden Real Estate Ventures, wrote in a research note. The grim picture of the housing market painted by falling home sales and the optimistic one illustrated by rising home price points to an imbalance in supply and demand that cannot be sustained, analysts said. Nationwide, according to the data released Tuesday, prices are 28 percent off their peak in July 2006, but they are up 6 percent from the low in April 2009.
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