The real estate report is happy — housing prices are up across the country. The S&P/Case-Shiller 20-city index, a volatile but closely watched index of house prices, was up 0.9% from the month before. That jump follows a collective 0.7% rise in April over March.
These numbers are seasonally adjusted — it’s important to smooth the data since traditionally home sales are hot in the spring.
In even better news, every one of the 20 cities in the index also reported month-over-month gains, with the strongest being Chicago (up 2.3%), Atlanta (up 2.0%), and Las Vegas (up 1.9%).
The Atlanta data is especially welcome, as housing prices there have been spiraling down looking for a bottom. Year-over-year, prices in Atlanta are still down a stunning 14.5%, but this month’s results may indicate that the diver has at least touched the ocean floor.
That might be the case on a national level as well. Year-over-year, the 20-city S&P/Case-Shiller index is still down, but the -0.7% fall is both better than the annual drop registered last month (-1.9%) and better than consensus expectations (which were looking for -1.0%, according to the Wall Street Journal).
In fact, 12 of the metro areas in the index reported positive annual returns. Standing out were Phoenix (up 11.5% year-over-year), Dallas (up 3.8%) and Denver (up 3.7%). Florida continues to sparkle, too, with prices in Miami up 3.4% annually and 1.4% month-over-month, and prices in Tampa up 2.5% annually and 2.0% month-over-month.
For market observers with a long view, these recent rises only put us back at the level of Spring 2003. There’s also been some “hidden deflation” as interest rates were higher then. (If a house now costs exactly what it did in 2003, but back then you could get a mortgage at 5% interest, and now you can get a mortgage at 4% interest, that house is worth less relative to its monthly carrying costs than it used to be.)
However, the broad base of the jump in housing prices is reason to celebrate. There are certainly still areas of slog — I’m hearing reports of pain in California from readers who aren’t in the big metros of Los Angeles or San Francisco, for example. But David Blitzer, chairman of the committee that publishes the indices, noted in the report’s release that all but three cities in the index saw their rates of change increase from April. (The missing trio are Boston, Charlotte, and Detroit; all those cities did ring up positive May changes, but they’re less improved than before.)
Will the good news carry over into summer? Blitzer was cautious in the report, noting that “we are definitely in a wait-and-see mode for the next few months.” That may be true, but at least this month’s data was reason to be optimistic.