Data through February 2013, released by S&P Dow Jones Indices for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, showed average home prices increased 8.6 percent and 9.3 percent for the 10- and 20-City Composites in the 12 months ending in February 2013. The 10- and 20-City Composites rose 0.4 percent and 0.3 percent from January to February. All 20 cities covered by the indices posted year-over-year increases for at least two consecutive months. In 16 of the 20 cities annual growth rates rose from the last month; Detroit, Miami, Minneapolis and Phoenix saw slight annual deceleration ranging from -0.1 to -0.4 percentage points. Phoenix continued to stand out with an impressive year-over-year return of +23.0 percent while Atlanta and Dallas had the highest annual growth rates in the history of these indices since 1992 and 2001, respectively.
“Home prices continue to show solid increases across all 20 cities,” said David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “The 10- and 20-City Composites recorded their highest annual growth rates since May 2006; seasonally adjusted monthly data show all 20 cities saw higher prices for two months in a row—the last time that happened was in early 2005."
“Phoenix, San Francisco, Las Vegas and Atlanta were the four cities with the highest year-over-year price increases," said Blitzer. "Atlanta recovered from a wave of foreclosures in 2012 while the other three were among the hardest hit in the housing collapse. At the other end of the rankings, three older cities—New York, Boston and Chicago—saw the smallest year-over-year price improvements."
In February 2013, the number of cities that posted positive monthly changes increased; Boston, Dallas, New York, Portland and San Diego are now among the MSAs posting month-over-month gains. Even though eight MSAs posted monthly declines, all twenty cities showed increases when compared to their February 2012 levels. Atlanta, Detroit, Las Vegas, Los Angeles, Miami, Minneapolis, Phoenix, San Diego, San Francisco and Tampa were the ten MSAs that continued to report double-digit year-over-year gains. San Diego and Tampa recorded their first months of double-digit annual increases of just over 10 percent.
“Despite some recent mixed economic reports for March, housing continues to be one of the brighter spots in the economy," said Blitzer. "The 2013 first quarter GDP report shows that residential investment accelerated from the 2012 fourth quarter and made a positive contribution to growth. One open question is the mix of single family and apartments; housing starts data show a larger than usual share is apartments.”
Quicken Loans Chief Economist Bob Walters said, “The lack of homes available for purchase has forced potential buyers into bidding wars. This clash of supply and demand has pushed home prices higher. While this is welcome news for sellers or those underwater on their mortgages, the lack of housing inventory has been troubling for both first time homebuyers and those looking to upgrade from their current property.”