By Alessandra Malito
Home prices continued to unimpress this month.
For the third consecutive month, the numbers have declined by 0.1 percent. But according to the Case Shiller 20-City Composites study, which gives a broader measure of U.S. home prices, there was an overall rise of 13.2 percent for the year-over-year.
Many do not see this decline as bad — in fact, it’s just a sign that the housing market is finally relaxing, becoming steady and healthy after a housing bubble disrupted the industry and nearly brought the economy to its worst state since the Great Depression.
“The housing market is returning to a much more normal functioning,” Gary Painter, director of research at USC Lusk Center for Real Estate, said.
Having a home price market that’s beginning to stabilize itself means people can stop thinking about when they will be able to buy or sell, and start acting. Buyers can start looking at the uptick in inventory being offered and sellers can move from home to home or rental to home.
It will also affect the way people consider having or raising families.
“They’re going to buy what’s best for them and their families,” Painter said. “I think the real focus becomes the fundamentals for families.”
Painter contributed a part of the normal home price market to the fact that more job positions are being filled.
“More people have jobs so there’s more money to spend,” Painter said.
According to the Employment Trends Index, there was a 4.4 percent increase in the job market, due in part to the number of temporary employees, job openings, industrial production and real manufacturing and trade sales.
It’s a good insight then that the job market is expected to continue on the rise. Gad Levanon, director of macroeconomic research at the Conference Board, said in a press release that components in the job study have suggested there will be a continued job growth rate in the coming months.
And even though most of the 20 cities saw a decline, some have seen home prices rise, such as Las Vegas.
Rob Pistone, a real estate agent for Coldwell Banker in Nevada, said that the market last year had a great run, and things are starting to slow down because of the big hedge fund investors pulling out of the area, meaning less money in its market.
The biggest indicator for the home price market in Las Vegas, Pistone said, is commercial development.
“If there’s no commercial development, there’s definitely not going to be residential,” Pistone said. “When they’re starting to build shopping and grocery stores, you know residential is coming.”
Prices in Las Vegas gained 1.1 percent, its 22nd consecutive monthly gain. Historically speaking, it has a long way to go before it’s at its peak again, but there seems to be hope for the next few years at least.
“I think our market is going to be stable between now and the end of the year,” Pistone said.
On the opposite side of the spectrum, like Chicago with the lowest numbers of a decrease by 1.2 percent, the indicator for the market depends on a small portion of the area, not Illinois as a whole.
“The challenge is non-peak neighborhoods, you have a wide variance of prices,” Steve Jurgens, a real estate agent for Chicago Home Estates, said. He suggests the way to see how Chicago is really doing is by looking at the top five neighborhoods in the area.
“The best way is in the upper neighborhoods or the neighborhoods with the higher values, which is a small mountain compared to the whole,” Jurgens said. “If it goes up in other places it’s an unrealistic outlook of what is in Chicago.”