Housing prices improve in August, Case-Shiller says
Economists surveyed by Bloomberg News had expected the Case-Shiller Home Price Index to fall at a 11.9 percent annual rate in August. The index fell 13.3 percent July, 15.4 percent in June, and 17.1 percent in May.
After 16 consecutive months of record annual declines, beginning in October 2007 and ending in January 2009, the indices have now registered seven consecutive months of improvement in annual returns.
Prices rise in 17 cities. Equally significant, only three cities -- Cleveland, down 0.5 percent, Charlotte, N.C., down 0.4 percent, and Las Vegas, down 0.3 percent -- registered price declines in August; 17 cities registered price increases.
And there was especially good news for Minneapolis area residents: the city registered the largest increase in August at 3.2 percent, the second straight month Minneapolis has snared that honor. San Francisco was second, notching a 2.8 percent gain.
"Broadly speaking, the rate of annual decline in home price values continues to improve" David M. Blitzer, Chairman of the Index Committee at Standard & Poor's, said in a statement. "While many of the markets remain down versus this time last year, the relative rate of decline has shown some real improvement. California, in particular, has seen some real positive prints in recent months. We see this general trend whether you look at the as-reported data or the seasonally adjusted figures."
August data shows continued firming. The areas with the largest year-over-year percentage declines were: Las Vegas, -29.9 percent, Phoenix, -25.1 percent, Detroit, -22.6 percent, Miami, -18.8 percent, and Tampa, -17.7 percent.
Year-over-year percentage price changes in other major U.S. cities were as follows: New York, -9.6 percent, Chicago, -12.7 percent, Boston, -4.2 percent, Washington, D.C., -7.9 percent, Atlanta, -10.6 percent, Dallas, -1.2 percent, Denver, -1.9 percent, Los Angeles, -12.0 percent, and Seattle, -14.7 percent.
Originally greeted by Wall Street with a shrug, S&P / Case-Shiller home price data rose to market-mover status in 2008 as it became clear that the United States' housing boom during the past decade was, in fact, a bubble fueled considerably by mortgage market excesses, from borrower to lender. The bursting of that bubble triggered record home mortgage foreclosures and mortgage back securities defaults, which led to the financial crisis that the U.S. and world are still trying to end today.
Housing Sector Analysis: Notch another modest victory for the U.S. housing sector. It appears that after a three-year plunge, home prices are turning the corner. Price declines in 20 major cities continue to decelerate on a year-over-year basis – a sign they are bottoming. Still, investors, and potential home sellers, should not become overly bullish: major headwinds remain, and the housing sector could retrench. Household formation has to increase to give the housing market the demand it needs to sustain its recovery. That means job growth has to start, and it appears we're still a few months away from net, monthly job gains in the U.S. economy.