S&P/Dow Jones Indices said this morning that its Case-Shiller 10-City and 20-City Composite Indices continued to rise in May, up 2.5 percent and 2.4 percent respectively from April levels. Case-Shiller also at least partially confirmed yesterday's data from Lender Processing Service (LPS) showing that four cities (as well as the states of Texas and Colorado) had established new peaks in housing prices in May.
Case-Shiller says that both Dallas and Denver "reached record levels surpassing their pre-financial crisis peaks set in June 2007 and August 2006. This is the first time any city has made a new all-time high." Neither city had particularly strong annual increases in their Case-Shiller numbers; Dallas was up 7.6 percent and Denver 9.7 percent, but neither city suffered the type of price declines experienced in other southwest and western cities, thus giving them a bit of an edge in the recovery. The other two cities which LPS reported had posted new price peaks were Austin and Houston, neither of which is among the 20 cities tracked by Case Shiller.
Both the 10-City and 20-City Composites posted the best year-over-year returns since March 2006. The 10-City increased 11.8 percent from May 2012 and the 20-City was up 12.2 percent.
David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices said, "Home prices continue to strengthen. Two cities set new highs surpassing their pre-crisis levels and five cities - Atlanta, Chicago, San Diego, San Francisco, and Seattle - posted monthly gains of over three percent, also a first time event."
All 20 cities posted both month-over-month and annual increases with two metropolitan areas having double digit annual increases. The Southwest and the West showed the strongest annual performances; San Francisco gained 24.5 percent on the index, Las Vegas a 23.3 percent, and Phoenix 20.6 percent. At the other extreme, New York (+3.3 percent), Cleveland (+3.4 percent) and Washington, D.C. (+6.5 percent) had the weakest gains and two cities, Cleveland and Minneapolis, were down slightly after seasonal adjustments.
"The overall report points to some shifts among various markets," Blitzer said. "Washington, DC is no longer the standout leader and the eastern Sunbelt cities, Miami and Tampa, are lagging behind their western counterparts."
As stated, all 20 cities had positive monthly returns in May but ten cities showed an acceleration in their monthly gains. Chicago had an increase of 3.7 percent in May compared to 2.7 percent in April while Miami and Seattle had their largest monthly increases since August 2005 and April 1990 respectively.
Average house prices in the U.S. are back to spring 2004 levels. Measured from the June/July 2006 peaks the peak-to-current decline for the 10-City and 20-City Composites is 24 to 25 percent. The recovery from the March 2012 lows is 15.9 percent for the 10-City and 16.5 percent for the 20-City Composites.