There are some bright spots on the horizon from the 2nd Quarter report from Case Shiller Home Price Index. Nationally we are up 3.6% back getting back to 2003 price levels. A little bit of bad news, Minneapolis has led the decline by double digits posting a -10.8% year over year decline in values. On the surface this sounds bad, but from my perspective I believe this is a good sign; This number is partially reflective of the lower price points are selling in the Twin Cities which drops the overall Median and Average price, I don’t believe everyone’s home values dropped by 10.8% this year (maybe in some neighborhoods..) Our inventory levels are shrinking and our pending sales are up 43% from last year, so we are in the recovery mode starting with the lower price points which will work its way up. While the composite 20 is boasting “back to 2003 levels” for pricing, the Minneapolis region is still bouncing around 2001 pricing. It sounds bad, but I believe this is the initial pain involved with healing our market. To summarize, I believe our region has going through the painful correction quicker than the other areas and is poised for quicker recovery. Our inventories are down, our prices are down making our affordability favorable to buyers – our current market activity is strong so pricing should be stabilizing if not increasing soon. Of course, this theory could be wrong if our region doesn’t start producing jobs…
Data through June 2011, released today by S&P Indices for its S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home prices, show that the U.S. National Home Price Index increased by 3.6% in the second quarter of 2011, after having fallen 4.1% in the first quarter of 2011. With the second quarter’s data, the National Index recovered from its firstquarter low, but still posted an annual decline of 5.9% versus the second quarter of 2010. Nationally, home prices are back to their early 2003 levels.
As of June 2011, 19 of the 20 MSAs covered by S&P/Case-Shiller Home Price Indices and both monthly composites were up versus May – Portland was flat. However, they were all down compared to June
2010. Twelve of the 20 MSAs and both Composites have now increased for three consecutive months, a sign of the seasonal strength in the housing market. None of the markets posted new lows with June’s report. Minneapolis posted a double-digit 10.8% annual decline; Portland is not far behind at -9.6%. Thirteen of the cities and both composites saw improvements in their annual rates; however; they all are in negative territory and have been so for three consecutive months.
- Case-Shiller Index – Minneapolis Posts 10.8% Annual Decline in Home Prices through June 2011 – Leads Nation Again (johnmurphyreports.com)