By Dees Stribling, Contributing Editor
The U.S. home-price recovery seems to be a sustained one, if the latest S&P/Case-Shiller Home Price Indices, which were released on Wednesday, are any indication. The 20-city composite index was up 4.3 percent in the 12 months ending in October 2012, while the 10-city composite index gained 3.4 percent year-over-year in October.
The gains were widely spread across the country, with only the Chicago and New York metro markets seeing annual declines in October (down 1.3 percent and 1.2 percent, respectively). Other markets—some of which were hit very hard by the housing crash—have made strong rebounds. Phoenix, for example, was up a whopping 21.7 percent annually in October, and also registered its 13th monthly gain in a row. Even long-beleaguered Detroit was up by a significant amount since last year: 10 percent.
“Looking over this report, and considering other data on housing starts and sales, it is clear that the housing recovery is gathering strength,” David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, noted in a press statement. “Higher year-over-year price gains plus strong performances in the southwest and California… confirm that housing is now contributing to the economy. Last week’s revision to third quarter GDP showed that housing represented 10 percent of the growth while accounting for less than 3 percent of GDP.”
LPS also reports home price spike
Lender Processing Services also released a U.S. home price index on Wednesday, which likewise pointed to significant improvement in most housing markets, though the company calculates its numbers a bit differently than Case-Shiller. In the case of LPS, the index is based on real estate transactions, excluding short sales and REOs, for a particular month, and drawing on data from more than 15,500 zip codes.
Nationwide, according to LPS, home prices were up 4.3 percent in October year-over-year. Like the Case-Shiller numbers, different markets chalked up different rates of change. By LPS’s reckoning, Phoenix was up 18.3 percent year-over-year, while Detroit gained 10.1 percent, to cite two aforementioned markets. According to LPS, Chicago wasn’t down, but it wasn’t up very much either, only gaining a meager 1 percent since October 2011.
LPS also reports on home prices by state. The biggest gainer among states since last October was Arizona, up 14.9 percent (though the state is still 38 percent off its peak in May 2006). California and Michigan also did well year-over-year, up 9.1 percent and 8.6 percent, respectively. Connecticut saw a 1.3 percent decline in home prices since last October.
Wall Street might have liked the home-price numbers, but investors were still skittish about the fiscal cliff on Wednesday. The Dow Jones Industrial Average lost 24.49 points, or 0.19 percent, and the S&P 500 was down 0.48 percent and the Nasdaq lost 0.74 percent for the day.