Trends in Home Prices and Home Sales

The 25-MSA Composite price declined only 0.7% during the month ending October 15, the smallest decline for that
time period since 2005. Prices increased month-over-month in 11 MSAs, mostly in the West Coast and Southeast
regions where seasonal factors are less salient than in other regions. Three- and six-month trends in the 25-MSA
Composite were also stronger than they have been at that time of year since 2005 (see Exhibit 3).
One-, three- and six-month trends in 25-MSA transaction counts were stronger in October 2009 than they have been
in any other October since the beginning of Radar Logic’s data in 2000 (see Exhibit 4). The 25-MSA transaction count
usually falls in August, September and October. This year, the 25-MSA transaction count has increased or remained
constant every month since January.
Transactions increased over the month ending October 15 in 22 of the 25 MSAs tracked by Radar Logic. Transactions
increased in all regions, with the exception of the Northeast, where Philadelphia (-21.2%) and Boston (-11.5%)
exhibited contraction in sales. New York outperformed its neighbors to the north and south, posting the first increase in
sales for the period since the beginning of Radar Logic data in 2000.
As the RPX values covered in this report correspond to transactions in early October, before Congress voted to extend
the $8,000 first-time homebuyer tax credit, the uptick in RPX transaction counts may reflect a rush of sales in advance
of the tax credit’s original November 30 deadline. In early November, Congress extended the program to include all
sales under contract by April 30, 2010 and closed by June 30, 2010.
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3
Both motivated and other sales increased, with motivated sales growing by 7.3% and other sales growing by 6.2%.1
As other sales increased from a higher base volume in mid-September, they increased from 74% of total sales to 75%.
This stability in the mix of motivated and other sales helped stabilize the 25-MSA Composite price. This contrasts with
the trend in September, when motivated sales increased 27% while other sales decreased 5%, resulting in a shift in the
mix of sales toward motivated sales with relatively low prices. This mix shift put downward pressure on the 25-MSA
RPX Composite price.