Case-Shiller: August Home Prices at 2-Year High

U.S. home prices continued to increase in August as the Case Shiller 20-city Home Price Index increased 0.9 percent to its highest level since September 2010. The 20-city index is up 2.0 percent in the last year. At 145.87, the index was down 12.9 percent from where it was just before the 2008 presidential election.

The index rose in 19 of the 20 cities, falling only in Seattle.

The 10-city index also rose 0.9 percent in August, increasing to 158.62, 1.3 percent ahead of August 2011 and the highest level since October 2010.

Economists had expected the 20-city index to be 2.0 ahead of August 2011.

The monthly gain in each index was slower than in July, when the 10-city index went up 1.5 percent and the 20-city index improved 1.6 percent. July also saw gains in all 20 index cities.

Four of the cities—Cleveland, Denver, Miami and Tampa—are located in “battleground” states. In all but one, Denver, the home price index remains below where it was in the last report before the 2008 election.

While the price index in Denver is up 0.6 percent in the last four years, it was down 29.2 percent in Tampa, 22.2 percent in Miami, and 7.3 percent in Cleveland.

The median price of an existing single family home dropped 1.5 percent in August, according to the National Association of Realtors, but was up 8.0 percent from August 2011. In July, the median price of an existing single family home was up 9.7 percent from one year earlier.

Home values play a significant role in the nation’s economy following the “wealth effect,” which holds that households spend more as perceived wealth increases. Increases in household net worth due to real estate (rather than stock) values have a greater impact on consumption, which is more than 70 percent of GDP.

The prices gains reported by Case-Shiller were led by a 2.3 percent gain in Detroit, a 1.8 percent increase in both Atlanta and Phoenix, 1.6 percent in Las Vegas, 1.3 percent in Los Angeles, 1.2 percent in Minneapolis, 1.1 percent in Washington, D.C., and 1.0 percent in both Cleveland and Miami. The year-over-year price improvement in Las Vegas was the first in that city—which had been a poster child for the housing boom—since December 2006.

Prices rose year-over-year in 17 of the 20 cities—compared with July when prices rose year-over-year in 16 cities—led by Phoenix, 18.8 percent, Minneapolis, 7.4 percent, Miami, 6.7 percent, Denver 5.5 percent and San Francisco, 5.3 percent.

The steepest annual price drop was in Atlanta (6.1 percent), followed by New York (2.3 percent) and Chicago (1.6 percent).

Even with the improvement in April, the 10-city price index is down 29.9 percent from its June 2006 peak, and the 20-city index is down 29.4 percent from its July 2006 high point.

 

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About SanDiegoatHomeTeam
Christian van't Vlie and Ivana Milosevic. Helping sellers and buyers successfully reach their real estate goals while keeping them informed every step of the way, disclosing all known facts and real estate practice procedures so that all involved parties can make well-informed decision. We care and we are at your service.

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