Sceptics dismiss US home price rise

Property industry observers were unimpressed by the 1 per cent uptick in US home prices reported yesterday by the S & P Case Shiller Index.

The index showed an increase for the second consecutive month, the first time that has happened in more than a year.   

But prices were still down 4.5 per cent from a year ago. And only one of the 20 markets covered by the index--Washington D.C.--showed an increase in prices from last May, a slight 1.3 per cent.

Spring is always a big month for home sales, David Blitzer, chairman of the index committee at Standard & Poor's, noted in the report.

"This is a seasonal period of stronger demand for houses, so monthly price increases are to be expected," Mr Blitzer said. "The concern is that much of the monthly gains are only seasonal."

High unemployment rates and an over supply of distressed properties in many markets have experts sceptical the housing industry is ready for a rebound.

"Year-over-year, prices continue to deteriorate, although there has been a seasonal uptick over recent months," Stuart Gabriel, director of UCLA's Ziman Center for Real Estate, told the Los Angeles Times. "This reflects a market that continues to be in search of a bottom."

Chris G. Christopher Jr., an economist with consulting firm IHS Global Insight, said there was little positive news in the Case Shiller report.

"Going forward, the Case-Shiller indexes are likely to post increases during the home-buying season, and then turn down again," he predicted.

The full Case Shiller report can be found here.