Despite unremitting gloom in America's worst hit corners, the nationwide US property market is showing fragile, flickering signs of life as buyers are tempted by a glut of bank-owned foreclosed property available at dirt cheap prices.
A monthly index published today by property valuations firm Clear Capital found a 5% year-on-year rise in US-wide prices for February, although after an uptick last year, progress has been slow – the quarter-on-quarter increase was zero.
"Although many markets have seen a slow down in price gains, I'm encouraged that prices have remained positive through the first two months of the year," said Alex Villacorta, senior statistician at Clear Capital.
Positive performers included relatively economically robust cities such as Houston and the Silicon Valley enclave of San Jose. And there were signs, too, that prices are off the bottom in one of America's poorest cities, Detroit, where Clear Capital found a 21.8% year-on-year rise in prices, albeit from a staggeringly low base with repossessed homes changing hands for as little as $10,000.
Still, the overall picture remains depressed. Banks filed repossession notices on 2.8m American homes during 2009. The worst affected areas were formerly booming areas such as Nevada, southern California and Florida, together with "rust belt" cities in Ohio and Michigan which lost thousands of jobs in manufacturing industries.
The average US family home cost $164,700 in January, according to the National Association of Realtors, which said 38% of homes changing hands were "distressed" transactions sold by banks or owners in danger of foreclosure. Home prices are back to their levels of summer 2003, the closely watched Case-Shiller index revealed last month.
