Prices rising in state real estate market

A surprisingly strong rebound in California's real estate market helped lift a key home price index for the eighth month in a row.

That's good news for people who plan to sell their homes. Prices are up almost 4 percent from the bottom in May 2009, but still nearly 30 percent below the May 2006 peak.

Prices rose 0.3 percent from December to January on a seasonally adjusted basis, according to the Standard & Poor's-Case-Shiller 20-city home price index released Tuesday. Prices increased in 12 cities in the index.

The biggest monthly gain was in Los Angeles, where prices rose 1.8 percent from December. Real estate agents say there's a distinct sense the worst of the downturn is over.

Buyers are "seeing that prices are creeping up," said Tony Middleton, a real estate agent with ZIP Realty who concentrates on the San Fernando Valley. "They're losing bids on homes and they have to bid again."

Prices in San Diego rose by nearly 0.9 percent. Phoenix had the third-largest gain at 0.8 percent.

Compared with the same month last year, the 20-city index was off just 0.7 percent from last year at a reading of 146.32. That was the smallest decline in almost three years and in line with analysts' expectations, according to Thomson Reuters.

No Northern San Joaquin Valley cities are included in the Case-Shiller index, but the February numbers for the region from real estate research firm MDA DataQuick showed some signs of price stability. Stanislaus County's median home price climbed back to $140,000 for February, the sixth time in eight months it has been at that level. The median price was up from $131,750 in January and slightly higher in year-to-year comparisons for the first time in nearly four years.

Some valley real estate agents believe prices have bottomed out after more than four years of declines. They think housing values may be starting to rise even though such increases haven't been reflected in the sales figures.

The valley's economy has been in decline since the housing bubble burst in late 2005, triggering job losses and foreclosures at levels that are among the worst in the nation.

But rising home prices could boost consumer optimism, economists say.

For most Americans, their home is their largest asset, so as values climb from the depths of the housing bust, homeowners feel wealthier and more comfortable spending. For homeowners who owe more on their mortgages than their properties are worth, rising prices rebuild equity.

This story was originally published March 31, 2010 at 12:44 AM with the headline "Prices rising in state real estate market."