Home prices in Seattle rise 1% in April from March

Home prices in the Seattle area and across the nation rose in April from March as government tax credits bolstered the housing market. But the rebound may be short-lived now that the incentives have expired.

The Standard & Poor's/Case-Shiller home-price index for Seattle showed a 1 percent gain, just ahead of the 0.8 percent gain for the entire 20-city index. The national index had fallen in each of the past six months.

Eighteen of 20 cities showed price increases in April from March. Washington, San Francisco and Dallas each posted gains of 2 percent or more. Eleven cities reversed their declines from the month before.

Only Miami and New York recorded price declines. Prices in New York were the lowest since 2004.

Seattle is still one of nine cities in the Case-Shiller index to show year-over-year price declines. Local home prices in April were 2.8 percent below their April 2009 level, and 24.5 percent lower than their July 2007 peak.

Nationally, prices remain 30 percent below their July 2006 peak, though they've risen 3.8 percent from their April 2009 bottom.

The overall monthly price gains highlight the tax credits' impact for homebuyers at the start of the traditionally strong spring selling season. Buyers rushed to purchase before the tax credits expired at the end of April. The numbers are likely to drop in the next report.

"Demand for homes has softened since then, and that is likely to weigh on prices, particularly in May and June," wrote TD Bank Financial Group economist Martin Schwerdtfeger on Tuesday. "Weaker sales and still-high foreclosures will likely drive month's supply higher in the near term, and this will put lid on home prices."

David M. Blitzer, the S&P's index chairman, said the recovery is not getting a consistent and sustained boost from the housing market. He doesn't expect that to happen until next year.

"Other housing data confirm the large impact, and likely near-future pullback, of the federal program," Blitzer said.

Last week, the government reported that new-home sales fell in May to their lowest level on record, plunging 33 percent from the month before. That was the slowest sales pace on records dating back to 1963. Sales of previously occupied homes edged down 2.2 percent.

Also, homebuilders KB Home and Lennar both reported sharp declines in new-home orders in the three months ended in May.

Patrick Newport, an economist at IHS Global Insight, expects prices to resume falling through next year and lose 6 to 8 percent more. The declines will be widespread, he predicts.

"In two to three months, the indexes for almost all the cities will begin falling again," Newport said.

Seattle Times business reporter Drew DeSilver and The Associated Press contributed to this report.