Analyzes S&P/Case-Shiller Home Price Indices

The Case-Shiller home price indices for June showed continued housing gains with the 10-city composite increasing 1.1 percent and the 20-city composite up 0.9 percent month to month on a seasonally adjusted basis. Fifteen markets showed seasonally adjusted month-to-month increases, while five declined.  All 20 markets are up year-over year by some 12 percent.  The 20-city composite is now up 15.7 percent from the trough, though it is important to note that this still leaves home prices down 23.4 percent from their pre-bust peak.

However, Peter Muoio, Ph.D., senior principal and economist with Research, says Case-Shiller home price indices for June may be strong, but the headline downplays drastic regional differences.

Washington DC has seen home prices dip 0.2 percent in June according to the Case-Shiller report, and a longer-term view shows a much less robust home price recovery in Washington DC, with prices up just 10.7 percent from their trough. Both Detroit and Cleveland have seen their economies stall from the earlier manufacturing rebound, and both these markets posted declines in home prices, with Detroit’s 1.4 percent monthly decline the worst among the 20 markets.

On the flip side, much attention is being paid to the sharp jumps in home prices in Phoenix and Las Vegas.  However, these increases are off extremely depressed levels. Las Vegas home prices are still a whopping 50.2 percent below their pre-bust level and Phoenix is still down 40.1 percent.  While the Phoenix economy is recovering, with moderate but pretty consistent job growth, the Las Vegas economy has shown far less economic recovery.


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