Home Prices Rise and Fall, Trying to Find Bottom

It's easy to get confused these days when reading the headlines about where housing prices are headed.

Zillow says home prices declined in the first quarter of 2010 by 1 percent quarter-over-quarter and fell 3.8 percent year-over-year. Integrated Asset Services (IAS) sees a rosier picture with national housing prices gaining 1.1 percent in March. The National Association of Realtors (NAR) found 91 out of 152 areas posted gains in median home prices.

Who's right? Well actually all of them.

Zillow looks backward to develop its report, which is based on home closings: In other words, what it can find in the public records, which tend to lag a couple of months after closing.

IAS develops its data based on pending transactions from its mortgage data base, so these sales may or may not be closed, giving IAS a chance to see further into the future.

For future trends IAS data is more accurate than Zillow. The NAR develops its data from closed sales, but does have access to those numbers earlier than Zillow.

So it appears house prices are stabilizing in many markets, while increasing in some and decreasing in others. To put it another way, we're gradually getting back to the old rule of real estate -- each local market has its own trend.