Case Shiller: Housing Forged Ahead In November
January 29, 2013
U.S. home prices were again stronger, year-on-year, in November, with the recovery in housing moving forward, even as the seasonal downdraft in prices associated with the colder months of the year was also in evidence.
Indeed, the latest S&P/Case-Shiller Home Prices Indices report showed that while home values around the country were 5.5 percent higher in November than they were in the same prior-year period, on a month-to-month basis several cities saw home prices decline in November.
The 10-City and 20-City composites dropped 0.2 percent and 0.1 percent, respectively, in November from October levels, with 10 out of the 20 cities surveyed seeing prices decline month-on-month. That’s a departure from the market’s performance last summer when all cities surveyed were posting higher and higher home prices on a monthly basis for several consecutive months.
That slowing momentum isn’t necessarily surprising given that, from a seasonal perspective, the fall and winter months tend to be the housing market’s weakest periods.
“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,” David Blitzer, chairman of the index committee at S&P Dow Jones Indices, said in the report.
Still, Blitzer pointed out that while 10 of 20 markets had lower month-on-month prices, the other 10 had higher prices than in the prior month.
That compares favorably with the October Case-Shiller report, which showed just seven markets having higher month-on-month prices—all of which is suggestive of a housing market on the mend, Blitzer said.
“The better annual price changes also point to seasonal weakness rather than a reversal in the housing market,” Blitzer added. “Housing is clearly recovering.”
All in all, an average home in the U.S. in November cost roughly what it did in the fall of 2003, and remains about 30 percent off its highest price level seen when the market peaked in 2006.
A Closer Look
Boston, Chicago and New York have been some of the worst faring cities in recent months. Each has seen more than six months of declining prices in the past 12 months.
In November, Chicago was the worst performing city with home prices there declining 1.3 percent from month-earlier levels. A home in Chicago in November was worth only 0.8 percent more than it did a year earlier.
In New York, home values remained 1.2 percent lower year-on-year in November, while in Boston homes have appreciated 2.3 percent in the past 12-months ended in November.
On the flip side, cities like Phoenix, San Francisco, Detroit and Las Vegas have all managed to tally double-digit gains in home values in the past 12 months. A home in Phoenix—one of the hardest hit markets during the housing crisis that began in late 2006—was worth 22.8 percent more than it did in November 2011.