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Cool Weather Cools U.S. Housing Recovery in January

NationalMortgageProfessional.com
Mar 26, 2014

Data through January 2014, released by S&P Dow Jones Indices for its S&P/Case-Shiller Home Price Indices has shown that the 10-City and 20-City Composites rose 13.5 percent and 13.2 percent year-over-year. Twelve cities and the 20-City Composite saw their annual rates worsen. The 10-City Composite showed a slight uptick in its index level, but remained relatively unchanged. The 20-City Composite, a broader measure of home prices, posted its third consecutive monthly decline of 0.1 percent. Twelve cities declined in January with Chicago decreasing 1.2 percent. Las Vegas led at +1.1 percent and posted its 22nd consecutive monthly gain. Despite recent advances, Las Vegas is still the farthest from its high set in August 2006 with a peak-to-current decline of 45 percent. Dallas and Denver are now less than one percent away from their recent all-time index highs. “The housing recovery may have taken a breather due to the cold weather,” said David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices. “Twelve cities reported declining prices in January vs. December; eight of those were worse than the month before. From the bottom in 2012, prices are up 23 percent and the housing market is showing signs of moving forward with more normal price increases." “The Sun Belt showed the five highest monthly returns. Las Vegas was the leader with an increase of 1.1 percent followed by Miami at +0.7 percent," continued Blitzer. "San Diego showed its best January performance of 0.6 percent since 2004. San Francisco and Tampa trailed closely at +0.5 percent and +0.4 percent. Elsewhere, New York and Washington D.C. stood out as they continued to improve and posted their highest year-over-year returns since 2006. Dallas and Denver are the only cities to have reached new record peaks while Detroit remains the only city with home prices below those of 14 years ago." Las Vegas and San Francisco remain the only two cities posting annual gains of over 20 percent. San Diego showed the most improvement with a year-over-year return of 19.4 percent in January from 18 percent in December. Phoenix saw its annual rate decelerate the most; the city’s return peaked last January when it led all 20 cities by a wide margin. Only seven cities—Las Vegas, Miami, New York, San Diego, San Francisco, Tampa and Washington—showed positive monthly returns in January. Chicago and Seattle declined the most and posted their fourth consecutive drop in average home prices. Although Cleveland continued its decline, it showed the most improvement with -1.5 percent in December to -0.3 percent in January. “Home price gains are slowing but we will continue to see momentum in the housing recovery," said Quicken Loans vice president Bill Banfield. "While many would love the home price gains we experienced in 2013 to continue, the annual moderation we’re seeing is a sure sign of a healthy housing market and that there is no bubble.”
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