Seattle home prices edge up in April from March — first rise in year

Sales prices of Seattle-area homes edged up in April from the previous month, the first rise in the closely watched Standard & Poor's/Case-Shiller home-price index in a year.

But April's 0.23 percent rise, while indicative of the Seattle market's relative resilience, doesn't signal that the long real-estate slide is at or near a bottom.

The Case-Shiller index for Seattle was 16.8 percent below the April 2008 level, the ninth-best — or rather, least-worst — performance among the 20 metro areas studied, and slightly better than the average 12-month decline of 18.1 percent.

Eight of the metro areas in the index showed one-month increases in April, led by Dallas with a 1.74 percent gain. But the cities hardest-hit by the housing bust — Miami, Phoenix and Las Vegas — continued to slump.

Seasonal factors most likely accounted for the April rise in Seattle and the seven other cities, said Patrick Newport, an economist with IHS Global Insight. Newport noted that last year the index also bumped up in April in seven cities, including Seattle, but prices afterward resumed their fall.

The 18.1 percent year-over-year decline in the 20-city index in April marked the third straight month the decline was not a record.

"The stock market bottomed in March and measures of consumer confidence have turned upward. This report shows that these better spirits are also appearing in the housing market," said David M. Blitzer, chairman of the S&P index committee.

But rising foreclosures fueled by layoffs could derail a meaningful turnaround. The number of homeowners at least two months behind or in foreclosure jumped in the first quarter from the previous quarter, a Treasury Department report said today.

Defaults from borrowers with good credit contributed to much of the increase in seriously delinquent loans, echoing data last month from the Mortgage Bankers Association. As the recession claims more jobs, borrowers in good standing are more likely to miss their mortgage payments.

Efforts to modify home loans have been slow and easily outpaced by the number of new delinquencies. In the first quarter, loan companies modified 185,156 mortgages, up 55 percent from the previous quarter. But the number of foreclosures in process increased to 844,389, up 22 percent.

And nearly one in four borrows who received a mortgage payment reduction fell behind again within six months, the report found.

"So far (the modification program) isn't showing large numbers, which tells me that it's not working and that's a problem," said economist Newport.

Nevertheless, stabilizing home prices will help stem the foreclosure crisis.

The 20-city index is off almost 33 percent from its peak in the second quarter of 2006, which means home values are now around 2003-levels.

"Prices are still dropping. They're just no longer in free fall," Newport said.

The Case-Shiller index tracks repeat sales on a specific group of homes in each city. Sales between related parties, such as family members, are excluded.

Information from Seattle Times reporter Drew DeSilver and The Associated Press is included in his report.