July 8, 2010 – Highlights from Altos Research’s June 10-City Composite Price Index include the following:

• The Altos Research 10-City Composite Price Index was flat in June and up just 0.2% during the second quarter of 2010.
• The Composite - which had shown sequential monthly declines for the past nine months - posted a positive reading during May but was unable to sustain the monthly increase in June.
• Asking prices rose in 13 of 26 major markets. San Francisco experienced the sharpest increase in June with prices rising 2.0%.
• Listed property inventory jumped in 25 of 26 markets tracked. Inventory increased at the fastest rate in San Francisco and Washington, D.C., up 7.6% and 7.1% respectively during June. During the second quarter, inventory increased by a relatively restrained 5.4% across the Altos Research 10-City Index markets. As of mid-July housing inventory levels are rising significantly, where last year at this time inventory was contracting.
• Housing demand has declined as a result of the end of the federal government’s tax credit, inventory is climbing and the effect on prices appears to just begun.

June Home Price Trends

The 10-City Composite Index was flat during the month of June and up just 0.2% during the second quarter of 2010. The Composite Index effectively bottomed out in January 2009 at $470,017, climbed throughout the first half of 2009 to $509,030 in July before returning to a gradual downward trend. The Index stood at $477,937 as of June 2010 reflecting a decline of 6.1% from its 2009 summer high.

The market has been heavily influenced by historically low mortgage rates and by the federal government’s home buyer tax credit. The tax credit applied to homes under contract by the end of April and closed by the end of June, although there have been some efforts in Congress to extend it once again. The tax credit may have pulled some housing demand forward but restrained increases in housing inventory appear to have muted the effect on prices of any drop-off in demand so far.

During June, listing prices increased in 13 of 26 major markets, were flat in two and declined in 11 markets. The Bay Area markets of San Francisco and San Jose experienced the sharpest increases in June with prices rising 2.0% and 1.5% respectively. The Bay Area markets also showed the largest increases during the second quarter with San Francisco up 4.4% and San Jose up 2.5%.