What does bump in spring home prices mean for real estate market?

Some experts are tempering their excitement about encouraging spring home price numbers.

Prices rose in 13 of the 20 cities tracked by the Standard & Poor’s/Case-Shiller home-price index, according to the April report released Tuesday. The sharpest increases were in Washington, D.C. The next-largest were in Seattle, San Francisco, and Atlanta.

The index covers metro areas that together make up about 50 percent of U.S. households. It measures sale prices of select homes in those cities compared with prices in January 2000. It then provides a three-month average. The April data is the latest available.

Tim Ellis, with the Seattle Bubble, tells 97.3 KIRO FM’s Ross and Burbank that the increases are pretty standard for the spring.

“Every spring prices tend to go up. It’s pretty seasonal and predictable.”

>Even David M. Blitzer, chairman of S&P’s index committee, said the rise in the index was likely due to the start of the buying season.

Listen to Tim Ellis on the Ross & Burbank show

“It is much too early to tell if this is a turning point or simply due to some warmer weather,” he said.

Ellis says the only times in recent history when prices didn’t see a spring increase was in the thick of the crash.

“In 2009, even through the spring, prices were falling pretty steadily,” says Ellis. He says against those numbers, there is reason to celebrate today. “It’s definitely optimistic in that we’re not crashing anymore, but it’s not like ‘Oh wow, let’s break out the champagne glasses and toast our equity all of a sudden.'”

Ellis says these seasonal increases are to be expected, and doesn’t necessarily speak to a larger upward trend.

“A little bump like this in the spring doesn’t necessarily indicate anything other than normal seasonal activity,” says Ellis. “My personal outlook is that we’re going to see things be pretty flat over the next few years, at least, but we’re going to see little seasonal bumps and dips.”

The Associated Press reports nearly 2 million foreclosures could hit the market over the next two years.

“There is a lot of inventory that the banks still need to work through, and it keeps on piling up. You hear more and more everyday about people walking away from their mortgages, and that’s inventory that’s going to end up distressed inventory on the market for years to come, and that’s I think a big part of why I don’t foresee us turning around and going into price increases anytime soon.”

By JAMIE GRISWOLD, MyNorthwest.com Editor
The Associated Press contributed to this report.