Home Price Gains Running Out of Steam?

Case-Shiller national index shows Q4 weakness

By Inman News, Tuesday, February 26, 2013

All three home price indices maintained by S&P/Case-Shiller finished 2012 with strong gains, but showed signs of losing momentum in the final three months of the year.

Case-Shiller’s National Home Price Index was up 7.3 percent from a year ago in the fourth quarter. The 20-City and 10-City Composite indices saw annual gains in December of 7.3 percent, 6.8 percent and 5.9 percent, respectively.

It was the seventh month in a row that the 20-City Composite posted an annual gain, with every market in the index except New York up for the year.

The National Home Price Index, after strong second and third quarters, slipped 0.3 percent from the third quarter to the fourth on a non seasonally-adjusted basis. When adjusted for seasonal factors, the national composite posted a 2 percent gain from the third quarter to the fourth.

The 20-City and 10-City composites were essentially flat from November to December, each growing by 0.2 percent on a non-seasonally adjusted basis. If adjusted for seasonal factors, those indices were up 0.9 percent from November to December.

David Blitzer, chairman of the index committee S&P Dow Jones Indices, said home prices ended 2012 “with solid gains,” but warned that future growth might not be as dramatic. 

The slowdown in growth in the national composite, combined with other housing data, suggests that “while housing is on the upswing some of the strongest numbers may have already been seen,” Blitzer said in a statement.

Among markets in the 20-City Composite, Phoenix led the way in 2012 with a 23.0 percent year-over-year increase in home prices. Dallas (6.5 percent), Denver (8.5 percent) and Minneapolis (12.2 percent) had their largest yearly gains since 2001.

Atlanta and Detroit, with gains of 9.9 percent and 13.6 percent, respectively, saw their greatest yearly home prices increase since S&P/Case-Shiller started tracking them in January 1991.

In December, nine of the 20-City Composite markets saw non-seasonally adjusted monthly declines in home prices. Chicago and Detroit led the way, with dips of 0.7 percent and 0.6 percent, respectively.

But if seasonal factors were taken into account, none of the 20 markets saw monthly price declines in December.

In the 12 months through December, home prices rose in 19 of the 20 markets in the 20-City Composite, with New York (-0.5 percent) the only market to see a decline.

The 10 markets experiencing non-seasonally adjusted monthly price declines in December were Chicago (-0.7 percent), Detroit (-0.6 percent), Portland (-0.5 percent), Seattle (-0.5 percent), Charlotte (-0.4 percent), New York (-0.4 percent), Denver (-0.3 percent), Cleveland (-0.1 percent), Dallas (-0.1 percent), Minneapolis (-0.1 percent) and Washington (-0.1 percent).

Markets seeing non-seasonally adjusted gains from November to December were Las Vegas (up 1.8 percent), Los Angeles (1.1 percent), Phoenix (0.9 percent), Miami (0.8 percent), San Francisco (0.7 percent), San Diego (0.4 percent), Atlanta (0.3 percent), Tampa (0.2 percent) and Boston (0.1 percent).