Sun State Savings

There have been no short­age of “hous­ing mar­ket” sto­ries lately. After sink­ing through much of late-last decade, home val­ues slowly sta­bi­lized into mid-2011. By Octo­ber 2011, val­ues appeared to have bottomed.

Today, nearly five-and-one-half years after the April 2007 hous­ing mar­ket peak, home prices are finally show­ing their abil­ity to rebound. Over the past 12 months, a bevy of hous­ing mar­ket data high­lights broad-based mar­ket growth.

For exam­ple, as com­pared to August 2011, Exist­ing Home Sales are up 9.3 per­cent nation­ally; New Home Sales are up 27.7 per­cent nation­ally; and home inven­to­ries have slipped to multi-year lows through­out the country.

Fur­ther­more, mul­ti­ple home value track­ers show home prices ris­ing both region­ally and nationwide.

Last week, the government’s Fed­eral Hous­ing Finance Agency released its Home Price Index (HPI) — a met­ric which tracks how home val­ues change between sequen­tial prop­erty sales. HPI showed home val­ues up 3.7% nationally.

Another home val­u­a­tion tracker — the S&P Case-Shiller Index — has shown home val­ues to be ris­ing, too.

As com­pared to one year ago, the private-sector met­ric puts home prices higher by 1.2 per­cent via its 20-city com­pos­ite. 20 cities remains a small sub­set of the broader U.S. pop­u­la­tion, but, in look­ing for a trend, it’s clear that the trend is a pos­i­tive one.

Some of the Case-Shiller Index high­lights from its most recent report :

• All 20 tracked cities showed home price gains between June 2012 and July 2012
• The pre­vi­ously hard-hit city of Phoenix now leads the nation with a 16.6% annual gain
• Ver­sus their respec­tive lows, San Fran­cisco and Detroit are up 20.4% and 19.7%

In addi­tion, on a 12-month basis, only four cities are show­ing neg­a­tive home value growth — Atlanta, Chicago, Las Vegas, and New York City.

The Case-Shiller Index is a national index, though, and specif­i­cally does not report on val­u­a­tion changes in spe­cific U.S. cities and their neigh­bor­hoods. For local real estate data, make sure to speak with a local real estate agent instead.

Home prices con­tinue to rise nationwide. 

Accord­ing to the Stan­dard & Poor’s Case-Shiller Index, home prices rose 6.9% between the first and sec­ond quar­ter of 2012, the largest quarter-to-quarter gain since the home-value tracker’s 1987 incep­tion and another sig­nal that the hous­ing mar­ket is in recovery.

The private-sector metric’s results are sim­i­lar to what the government’s Home Price Index showed for June, too — val­ues ris­ing quickly. In addi­tion, for the sec­ond straight month, each of the Case-Shiller Index’s 20 tracked mar­kets showed month-to-month improvement.

June would have marked three straight months if not for Detroit’s value-setback in April.

The top per­form­ing mar­kets in June, as tracked by the Case-Shiller Index were :

1. Detroit, Michi­gan : 6.0 per­cent gain
2. Min­neapo­lis, Min­nesota : 4.8 per­cent gain
3. Chicago, Illi­nois : 4.6 per­cent gain

How­ever, it should be noted that the Case-Shiller Index pulls from a lim­ited sam­ple set. It does not include con­do­mini­ums or multi-unit homes in its find­ings, nor does it account for new con­struc­tion. These exclu­sions make a mate­r­ial impact on the results of both Min­neapo­lis and Chicago, as exam­ples. Both cities fea­ture a large con­cen­tra­tion of condos.

Over­all, though, the June data looks sound. Said a spokesman for the Case-Shiller Index, “The mar­ket may have finally turned around.”

Fur­ther­more, home buy­ers nation­wide can cor­rob­o­rate what the Case-Shiller Index has uncov­ered. Falling home inven­tory and ris­ing home demand have helped to move home prices higher in many U.S. markets.

Low mort­gage rates make new homes afford­able and ris­ing rents are turn­ing the Rent vs Buy equa­tion on its head. In July, accord­ing to the National Asso­ci­a­tion of REALTORS®, first-time home buy­ers accounted for 34% of all home resales.  This trend is expected to con­tinue into 2013.

As com­pared to one year ago, today’s home buy­ers have 8% more pur­chas­ing power and, with ris­ing home prices, they’re going to need it.