The S&P/Case Shiller Home Price
Index scored its greatest year over year gain in over seven years in October
the company said today. Both the 10-City
and the 20-City Composites were up 13.6 percent compared to October 2012, the
17th straight month the two composites had increased compared to the
same month the previous year. It was the
largest annual gain since February 2006.
On a monthly basis the two Composites
gained 0.2 percent. The company's report
said that "Eighteen of the 20 metropolitan areas tracked by the survey posted
lower monthly rates in October than in September. After 19 months of gains San Francisco posted
a slightly negative return." Phoenix
posted its 25th consecutive increase in October.
David M. Blitzer, Chairman of S&P's
Dow Jones Index Committee said that while each index continued to show
double-digit annual returns, "Monthly numbers show we are living on borrowed
time and the boom is fading."
He said that, despite those double-digit
returns for both Composites and thirteen of the cities therein, "Cities at the
top of the range (Las Vegas, San Diego and San Francisco) saw smaller annual
increases. On the other hand, cities
that have been relatively underperforming (Cleveland, New York and Washington)
saw their annual gains grow. Miami
showed the most improvement. Chicago
recorded its highest annual rate (+10.9 percent) since December 1988. Charlotte and Dallas posted annual increases
of 8.8 percent and 9.7 percent, their highest since the inception of their
indices in 1987 and 2000."
Blitzer said that the key question
facing housing is the direction the Federal Reserve will take in scaling back quantitative
easing and how this will affect mortgage rates.
"Other housing data paint a mixed picture suggesting that we may be
close to the peak gains in prices.
However, other economic data point to somewhat faster growth in the new
year. Most forecasts for home prices
point to single digit growth in 2014."
Home prices for both the 10- and 20-City
indices have recovered to mid-2004 levels.
The two Composites peaked in the summer of 2006 and are now down about
20 percent from those peaks, more than half-way back from the post-recession
lows established in March 2012. The 10-City
has gained 23.1 percent and the 20-City 23.7 percent since hitting those troughs.
Ten cities posted positive monthly
returns in October, with Las Vegas and Miami having the greatest gains at 1.2
percent and 1.1 percent respectively.
Nine cities declined month over month (Atlanta, Boston, Chicago,
Cleveland, Dallas, Denver, San Francisco, Seattle, and Washington). Charlotte and Miami were the only two with
larger gains from September to October than from August September while New
York remained flat.
All 20 cities had positive annual growth
and thirteen had higher October numbers than September. Miami had the biggest jump, from an annual
rate of 14.3 percent in September to 15.8 percent in October. Las Vegas, Los Angeles, and San Francisco continued
to post annual gains over 20 percent.
The S&P/Case-Shiller Home Price
Indices track the price path of typical single-family homes in each
metropolitan area covered. The indices have a base value of 100 in January 2000
so a current value of 150 indicates prices in that market have increased by 50
percent since January 2000. Detroit at
present is the only city that is below that base with an index value of 94.79.