In real estate, it’s all good — the data, that is. Housing prices rose all over the country in September, according to two data series released this week.
The S&P/Case-Shiller 20-city composite home price index, a widely watched national measure released today, showed home prices gaining 3.0% over a year ago. Just as importantly, that index marked its sixth straight month of price increases. The Lender Processing Services Home Price Index, a slightly more bullish index because of the way it adjusts for foreclosure sales, was released Monday afternoon, and reported a price increase of 3.6% year-over-year in September.
Both indices showed broad strength in the real estate markets. On a seasonally adjusted basis, 18 of the cities in the S&P/Case-Shiller composite showed gains, with only Chicago dropping 0.7% from August and Tampa remaining flat. Atlanta, which had been lagging the housing recovery, appears to have come off the mat; the city posted a 1.7% increase in home prices from the previous month.
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If you’re shopping for bargains, prices nationally are still significantly below their peak values of about six years ago. (Your mileage may vary as different local housing markets peaked at different times.) Looking particularly cheap on a historical basis is Detroit, where prices are around 20% below their January 2000 levels.
On a not-seasonally-adjusted basis, several metros showed month-to-month declines, a function of the fact that consumers generally like to buy homes in the spring and summer in order to get their children settled for the upcoming school year. Non-seasonally adjusted decliners included Cleveland (down 0.9%), Boston and Chicago (both down 0.6%), Charlotte (down 0.3%), and New York (down 0.1%).
However, the fact that all of these markets — with the exception of Chicago — registered gains on a seasonally adjusted basis shows just how strong the recovery is. In the months to come, we may see some weakness in the data as consumers turn their focus from Colonials to Christmas, but there’s nothing in the data that indicates a likelihood of a dip in the market like the nation saw two years ago. Even despite the predictions of “fiscal cliff” Cassandras, it looks like home prices should continue to show seasonally adjusted rises at least for the next few months.
Of course every local market is recovering at its own pace. Phoenix, an investor’s nightmare during the housing crash, has turned back into a speculator’s playground, with gains of 1.3% over the past month (on a seasonally adjusted basis) and an annual return of 20.4% per year. Las Vegas and Miami, two other metros that got hurt as the market for second and vacation homes collapsed, have now posted year-over-year gains of 3.8% and 7.4%, respectively.
For its part, LPS showed the top five metros with the biggest gains as: Phoenix up 1.3%; Ocean Pines, Md., up 1.1%; Sacramento up 0.9%; and Atlanta and Baltimore each up 0.8%.