The S&P/Case Shiller Home Price Indices posted another set of strong and broad-based annual increases in November 2012. Data released today shows that the 10-City Composite Index rose 4.5 percent and the 20-City Composite was up 5.5 percent compared to November 2011. Prices rose in 19 of the cities the tracked by the indices with only New York showing an annual decline, 1.2 percent. The year-over-year increase was greater than that posted in October for all of the cities except Cleveland where the annual increase was unchanged.
Prices were down by 0.2 percent in the 10-City Composite and 0.1 percent in the 20-City compared to October's numbers. In October both indices declined 0.2 percent compared to September. Prices declined in 10 of the 20 cities in November.
David M. Blitzer, Chairman of the Index Committee said, "The November monthly figures were stronger than October, with 10 cities seeing rising prices versus seven the month before.
"Phoenix and San Francisco were both up 1.4% in November followed by Minneapolis up 1.0%. On the down side, Chicago was again amongst the weakest with a drop of 1.3% for November.
"Winter is usually a weak period for housing which explains why we now see about half the cities with falling month-to-month prices compared to 20 out of 20 seeing rising prices last summer. The better annual price changes also point to seasonal weakness rather than a reversal in the housing market. Further evidence that the weakness is seasonal is seen in the seasonally adjusted figures: only New York saw prices fall on a seasonally adjusted basis while Cleveland was flat.
Blizter said that regional patterns are shifting as well with the Southwest including hard-hit Las Vegas and Phoenix staging a strong comeback and Miami and Tampa in the Southeast close behind. "The sunbelt, which bore the brunt of the housing collapse, is back in a leadership position. California is also doing well while the northeast and industrial Midwest is lagging somewhat," he said.
Phoenix is, in fact, staging a very strong comeback. Prices have rising 22.8 percent over the last 12 months, the largest increase of any of the cities, and November was the seventh consecutive month it posted a double-digit annual return.
Blitzer said, "Housing is clearly recovering. Prices are rising as are both new and existing home sales. Existing home sales in November were 5.0 million, highest since November 2009. New Home sales at 398,000 were the highest since June 2010. These figures confirm that housing is contributing to economic growth."
As of November average home prices nationally have returned to the levels of autumn 2003 and are down from their respective peaks in June/July 2006 by about 30 percent. Measured from the recent lows prices hit in early 2012 both composites have recovered by 8 to 9 percent.
The cities posting negative month over month returns in November were Boston, Chicago and New York (all of which have seen declines in six out of the last 12 months), Charlotte, Cleveland, Dallas, Detroit, Portland (OR), Tampa and Washington DC
The S&P/Case-Shiller Home Price Indices are constructed to accurately track the price path of typical single-family homes located in the relevant metropolitan areas. The indices have a base value of 100 in January 2000; thus, for example, a current index value of 150 translates to a 50% appreciation rate since January 2000 for a typical home located within the subject market.
