Didn’t John Paulson say this would happen?
“Good morning” — this from Standard & Poor Dow Jones this morning — good indeed!
“At 9am EST today, S&P Dow Jones Indices released the latest results for the S&P/Case-Shiller Home Price Indices. Data through September 2012 reveals the following:
- · The national composite was up 2.2% in the third quarter of 2012 versus the second quarter of 2012, and up 3.6% versus the third quarter of 2011.
- · In September 2012, the 10- and 20-City Composites showed annual returns of +2.1% and +3.0% respectively .
- · Average home prices in the 10- and 20-City Composites were each up by 0.3% in September versus August 2012.
- · Seventeen of the 20 MSAs and both Composites posted better annual returns in September versus August 2012.
- · Detroit and Washington D.C. recorded a slight deceleration in their annual rates, and New York saw no change.
- · Measured from their June/July 2006 peaks, the decline for both Composites is approximately 29% through September 2012.
- · For both Composites, the September 2012 levels are approximately 9% above their recent lows seen in March 2012.”
What does this mean for us? Dallas home PRICES continue to edge upward, and Dallas/Fort Worth saw the biggest real estate value gain in more than five years in September. Most major U.S. cities saw home values increase, too, meaning maybe, MAYBE the nation’s housing rebound is cooking.
Of course, there is still the Fiscal Cliff AND that capital gains tax nestled into Obamacare, so the market may be cooking but I would not call it well done. And I have my hands over my ears right now EARMUFFS! just thinking about doing away with or limiting the home mortgage deduction.
Still, this is going to be the best Christmas ever for a LOT of agents, sellers and buyers. Everyone I’ve talked to is busier than a one-armed wallpaperhanger. Prices of pre-owned single-family homes in the Dallas area are up a full 4.4 percent from a year ago, this according to Case-Shiller Home Price Indices. While still not my favorite index because it doesn’t include new home sales or condos, it’s a good sign that it’s perking up. I can still remember hearing Bob Shiller in NYC in 2009 telling us housing may NEVER recover. Even better, September was the seventh month that home prices have increased in Dallas/Fort Worth from a year earlier.
Nationally, the home prices were up 3 percent in September from last year.
The S&P folks are downright giddy: “The entire nation is on the rebound,” said David Blitzer, managing director of S&P Dow Jones Indices: six months of good numbers — a recovery he called “real and will be maintained going forward.”.
Well that’s nice, but we also just had an election and incumbents usually turn up the rosy to get re-elected. Still, even Phoenix home prices are up 20.4% from last year — the window to buy at the bottom in the Sand States is clearly over. And look at Miami — 7.4%– international sales are keeping that market hopping. New York and Chicago saw declines. Atlanta was flat. I know the Chicago market is dreadful; Illinois has one of the worst foreclosure rates in the nation. and northern Illinois real estate is no picnic, which is why so many snowbirds are moving here.
Which helps our home prices: with higher rents, pent-up demand and an increasingly limited supply of inventory, we may see even higher prices down the road in North Texas.
D’Ann Petersen, a business economist for the Federal Reserve Bank of Dallas, told Steve Brown (Paywall): “Our [Texas] economy is one of the few that has reached the point where we’ve gone beyond pre-recession employment levels.”
We know the David Fair drill: Dallas has a stable, diversified economy, job growth, and a thriving energy sector. And our prices never bubbled.
Dallas home prices peaked about June, 2007; anyone who sold about that time was a genius. Our prices now, however, are only about 3.9 percent down from that peak. Looking at the rest of the country, the Case-Shiller index shows home prices 29 percent below the mid-2006 peak: I’ll take flat over roller coaster any day.
Here are some other items contributing to the strength of our market:
-Housing Supply: Dallas has about four months, Fort Worth five months
-Rents are going up up up, with the average Dallas-area apartment rent at $867, a 7% increase from 2007 and only going higher with increased demand despite all the apartments going up.
-Interest rates are still low IF you can get financing, which remains the biggest hurdle.
-Foreclosures are at their lowest in three years yeah!
– Texas added 36,600 jobs in October, including 11,700 in Dallas. We are rocking and rolling.
Today’s good news just goes to show you how vital housing is to our economy. It was unbridled buying and mortgage securitization that got us into this mess, small wonder everyone breathes a huge sign of relief as housing gets healthy and leads us out. My chief concern and one huge reason why I’m not drinking yet: that mortgage interest deduction. Something’s gotta give in DC for this budget fight, and if they strip us of the home mortgage deduction, well, it won’t be pretty.
|S&P Case-Shiller Home Price Index
|Home prices increased in September in 18 of 20 cities in the Case-Shiller index. Change from a year earlier: