As summer days fade away into fall, the long term impact of this year's buying season on prices is coming into clear focus.
For an economy that's still sick and ailing, good progress was made. But when all is said and done, momentum sputtered out far short of recovering the losses incurred by the double dip in prices during the first quarter.
The two first reports on August sales, Clear Capital and Altos Research, found housing markets made a valiant effort through the summer months but the weakening national economy slowed the monthly gains and kept prices at levels 5 to 7 percent below last year's.
Through August, Clear Capital reported home price gains of 4.0 percent comparing the most recent rolling quarter to the previous one. However, the rate of growth has begun to slow as the summer buying season comes to an end and economic confidence shows signs of weakening.
Altos found that since reaching a peak in early July, housing markets cooled off week by week. The weekly-sampled prices are still trending downward and the 90-day prices have begun their descent. The declining curve is expected to become more pronounced as markets continue to cool.
"The loss of momentum from the summer market activity is unmistakable.
Transaction statistics published by S&P/Case-Shiller will show the same
loss of momentum in a few months," said Altos.
Some highlights from Clear Capital:
• The Midwest region leads the nation with a seasonal quarterly home price gain of 7.3 percent, followed by the Northeast at 4.9%, South at 3.5% and West at 0.7 percent.
• The gains of summer are not recouping the longer-term declines, and national yearly home prices are down -6.2 percent compared to last year's levels.
• Jacksonville replaces Detroit as the lowest performing major market, posting a -2.7 percent quarterly price change.
• Low economic confidence (as indicated by recent Gallup polls) and a continued high unemployment rate supports Clear Capital's projection of downward home price movement for the remainder of 2011.
Altos Research found similar trends:
• The August, 2011 Altos 10-City National Composite median home price ticked down to $447,679 from $450,176 in July. This was the second consecutive month over month decline.
• Inventory was up in 12 markets and down in 14 markets. The biggest inventory increase was Boston (1.34 percent) and the largest decrease was Tampa (-9.87 percent).
• Only one market reported a price change larger than 2 percent, which was Tampa (2.21 percent).
• The biggest price changes were small again this month, which is the third consecutive month of small price changes.
• Prices decreased in 17 markets, which is a significant change from seven markets in July and one market in June.
• The 7-day numbers are trending downward. The 7-day trends are always the first indication of a shifting market and the 90-day numbers are beginning to show declining prices, which was indicated in the flattening that was first reported two months ago.
"With summer coming to a close and the price gains clearly starting to level off, the market is at a critical juncture as to whether it can avoid another significant downturn into the slower buying seasons of fall and winter. said Dr. Alex Villacorta, director of research and analytics at Clear Capital.
Said the Altos report, "The spring price and inventory bumps are over and we're settling in for a long, cold winter."