Surprise: Home Prices Rise in July

Surprise: Home Prices Rise in July

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Home prices statistics have been released for July 2011 and that news is surprisingly good. In its monthly report released on September 27, 2011, S&P Indices has seen its 10- and 20-city indices rise by an identical 0.9 percent for the month, the fourth consecutive month of increases. [1]

Have home prices bottomed out? That’s an entirely possible, especially in some local markets that have eliminated the double-digit annual gains recorded since the 1990s.

Local Prices

Not every city tracked has seen its prices increase. Las Vegas and Phoenix continue to post month over month declines, while Washington, D.C. prices have stabilized. The nation’s capital has been a bit of an oddity anyway as an expanding federal government has attracted thousands of new workers, people eager to buy homes. Tighter supply in the D.C. area has helped housing prices rise there.

Detroit has seen some of the biggest drops in housing prices, but for the month prices in the Motor City rose by 1.2 percent.

“With July’s data we are seeing not only anticipated monthly increases, but some fairly broad improvement in the annual rates of change in home prices,” says David M. Blitzer, Chairman of the Index Committee at S&P Indices. “This is still a seasonal period of stronger demand for houses, so monthly price increases are expected and were seen in 17 of the 20 cities. The exceptions were Las Vegas and Phoenix where prices fell, while Denver was flat. The better news is that 14 of 20 cities and both Composites saw their annual rates of change improve in July.”

Sustainable Recovery

Despite four consecutive months of home prices rising, no one seems eager to call the recovery sustained. Continuing federal budget deficits, high unemployment and weak consumer spending may continue to impact the market. Moreover, Europe’s debt crisis seems to be casting a pall over much of the rest of the world.

Said Blitzer, “While we have now seen four consecutive months of generally increasing prices, we do know that we are still far from a sustained recovery. Eighteen of the 20 cities and both Composites are showing that home prices are still below where they were a year ago. The 10-City Composite is down 3.7% and the 20-City is down 4.1% compared to July 2010. Continued increases in home prices through the end of the year and better annual results must materialize before we can confirm a housing market recovery.”

For a rough idea of housing prices in your area, Zillow offers estimates of what your house might fetch if it were sold today. [2]

References

[1] S&P Indices: Home Prices Continue to Show Seasonal Strength According to the S&P/Case-Shiller Home Price Indices

[2] Zillow: Zestimates

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Categories: Home Buying