Major City Home Prices Rise by Most in Two Years

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Tobias Nergarden of Real Estate Marketing Insider comments on news today in Bloomberg that the S&P/Case-Shiller index of prices rose 2 percent from August 2011 to 2012, marking the largest year-to-year gain since July 2010.

Mr. Nergarden of REMI offered his support of news from Bloomberg that price indexes of 20 U.S. cities experienced their highest rise in 2 years in August, saying it was excellent news for home sellers and a sign that the market recovery is underway.

The S&P/Case-Shiller Property Index, which measures national home prices through indexing 20 major U.S. cities, released its numbers for August today. The 2 percent year-over-year increase surpassed estimates of most analysts, who were predicting a 1.9 percent increase. In July, the Property Index reported a 1.2 percent year-over-year spike, marking a continued trend of price growth.

Economists predict continued growth in prices, and corresponding gains in consumer confidence in other areas. Helping ensure the continued recovery is a promise by the Federal Reserve to keep interest rates low through 2015, driving growth and encouraging investment.

Month-to-month, August average home prices showed a 0.5 percent gain from July. Of the 20 markets surveyed, only Seattle failed to show a gain in prices, instead declining a negligible 0.1 percent. Some analysts worry about the effects Hurricane Sandy may have had on month-to-month sales figures, especially in the Northeast; but according to economists (including Case and Shiller themselves), professionals in real estate tend to weigh the year-over-year numbers more heavily anyway, given that monthly figures are easily influenced by outside sources.

Most industry professionals are forecasting continued growth, despite Sandy and the traditional seasonal decline in prices that occurs in winter. In addition to historically-low mortgage rates, experts point to surging housing demand; in the Commerce Department’s report, demand has risen 27.1 year-over-year. The new recovery of the housing market has begun to trickle into other industries, including appliance makers and materials supply. Whirlpool Corp., the world’s largest appliance maker, reported their highest share value in more than two years, following the release of their 2012 earnings forecast.

Tobias Nergarden of REMI commented on the release of the August S&P/Case-Shiller Property Index, which held good news for the economy. The Index reported that August home prices nationwide had their largest year-to-year increase since July 2010, and that monthly, all but one market - Seattle - posted gains. Economists forecast continued increases in prices going into next month.

About the Real Estate Marketing Insider:
REMI provides real estate professionals with insider tips, news, and analysis. The online newsletter is based in La Jolla, CA.

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