Many U.S. homes now cheaper per square foot

The price per square foot of homes declined in 22 of 25 U.S. metro areas tracked in a February price index compared to the same month last year, real estate data and analytics company Radar Logic reported today.

The company’s RPX Monthly Housing Market Report found that the price per square foot plunged 29.8 percent in Sacramento, Calif., during a 28-day period in February compared to that period last year, which was the steepest decline among the group of 25 metro areas. The price-per-square-foot metric is intended to reduce the influence of house sizes on price trends.

Sacramento homes had an average price per square foot of $161.14 in February, which was down 2.7 percent compared to January.

Las Vegas homes had the second-highest year-over-year decline in price per square foot in February, falling 26.2 percent. San Diego was third with a 24.7 percent year-over-year drop in February, and nine other markets on the list also suffered double-digit percentage drops in price.

Price gains were reported in Charlotte, N.C., where the price per square foot grew 3.6 percent year-over-year in February; in Milwaukee, Wis., up 3.4 percent; and in New York, up 1.1 percent.

The RPX index found that 10 metro areas had price-per-square-foot increases in February 2008 compared to January 2008.

Denver jumped up eight places on the RPX Index list compared to the previous month, meaning its price per square foot improved compared to the metro areas that it passed on the last. That market still had a 5.4 percent year-over-year drop in price per square foot in February, though this metric was up 2.7 percent compared to January.

Minneapolis fell five spots in the RPX rankings in February compared to January, with 4.7 percent month-to-month decline in price per square foot.

Seattle led the group of 25 metro areas with a 6.2 percent two-year annualized gain in price per square foot, while Sacramento, Calif., suffered the largest loss during that period at 18.8 percent. Seattle led with a five-year annualized gain of 9.6 percent, while Detroit was last on the list with a 2.5 percent five-year annualized loss.

Earlier this week, a separate price index that tracks 20 major U.S. metro areas dropped 12.7 percent in February compared to the same month last year. In that Standard & Poor’s/Case-Shiller index, which tracks price changes based on repeat sales of homes, Las Vegas had the steepest annual decline in February — down 22.8 percent compared to February 2007. And Charlotte, N.C., was the lone market area in that index with a year-over-year gain, at 1.5 percent.

The S&P/Case-Shiller index does not count new homes and condos, while the RPX index is based on all housing types.

The National Association of Realtors trade group last month released a report on resale home prices and sales that showed a 7.7 percent drop in the median price and a 19.3 percent decline in the sales rate in March 2008 compared to March 2007. And the U.S. Census Bureau reported that the sales rate of new homes was down about 36.6 percent in March compared to the same month last year while prices were down 13.3 percent. The new-home sales rate has fallen about 62 percent from its July 2005 peak, the Census Bureau also reported.

February 2008 RPX Index

Source: Radar Logic Inc.

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