They may be talking Fiscal Cliff in D.C., but you can only say good things about our housing market unless, that is, you live in Chicago. Or New York. The Standard & Poor’s/Case-Shiller Index shows home prices continued to rise in October, with prices up 4.3% annually within the 20-city composite index that S&P scrutinizes for us.

Why October? Because right now, in December, that is the latest month that has all the documentation in and complete from the recording offices across the nation.

S&P says it’s a “sustained recovery” in home prices, and S&P does not fool around. I heard Robert Shiller speak in 2009 and he was Debbie Downer when it came to housing then. S&P is not the only research firm calling for the bubbly. Lender Processing Services says that pre-owned housing prices are now up 4.3% year-over-year in October. In September the index was up 2.1%; it showed a 3.4% annual gain in October.

Poor Chicago and New York were the only cities with negative home price returns for October. September was a better story:

“The five MSA’s where home prices fell in October but not in September were Atlanta, Dallas, Miami, Minneapolis and Seattle”

David Blitzer, chairman of the index committee at S&P Dow Jones Indices, says housing is gaining strength. The strongest performances are in the southwest and California, like Phoenix where homes were selling for a quarter on the dollar just a few years ago.

Over the holidays, I met a delightful Phoenix transplant to our region who told me they had no problem selling their home to move here.

And again, we hear what I have preaching to you since Day One: real estate is a LOCAL story. You have to look at individual markets which show us how high we’ve come from the bottom pits of 2008/2009. And right now, even old, icky stuff is moving in Dallas,

See this treasure? It was vacant for more than 22 years in Oak Lawn Heights, Rob Elmore of the crack Garrey & Elmore team at Keller Williams got six offers in two days and closed in under thirty days… for 98% of list.

Dallas home prices were up 4.6% over October 2011, with a few gyrations there in September and October that I don’t really care about because I know how busy everyone is selling.

Blitzer almost seemed to say that our market is “normal”, like it was pre-steroidal market:

“San Francisco and Phoenix have also rebounded from recent lows by 22.5% and 22.1% with prices comfortably higher than 12 years ago,” said Blitzer. “The smallest recoveries are seen in Boston and New York, two cities in the northeast which suffered smaller losses in the housing bust than the Sunbelt or California.”

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:
Phoenix 20.4%
Minneapolis 8.8%
Detroit 7.6%
San Francisco 7.5%
Miami 7.4%
Denver 6.7%
Tampa, Fla. 5.9%
Seattle 4.8%
Dallas 4.4%
San Diego 4.1%
Los Angeles 4.0%
Las Vegas 3.8%
Portland, Ore. 3.7%
Charlotte, N.C. 3.5%
Washington 3.2%
Boston 1.9%
Cleveland 1.4%
Atlanta 0.1%
Chicago -1.5%
New York -2.3%
Composite 3.0%
SOURCES: S&P/

I am pleased with the local numbers out from the nation’s major data trackers. The latest Case-Shiller report released Tuesday morning showed that seasonally-adjusted home prices fell 0.7 percent nationally between October and November 2011, and dropped by about 3.7 percent since November 2010. We did sooo much better, even when looking at stodgy Case-Shiller which I don’t like for many reasons, for one that they do not include new homes sales. In Dallas, the index reported that home prices decreased on a monthly basis (1.3%) as well as went down between November 2010 and November 2011 (.8%). That is less than one percent and well could be a margin of error. 

Researchers at Fiserv and Moody’s Analytics tell us that Dallas-area home prices will drop furth 1.3 percent by the third quarter of this year. (Fiserv uses Case-Shiller figures along with data from the Federal Housing Financing Authority.) But they are expected to rise 0.4 percent in 2013. This company tells us local prices declined 2.7 percent in 2011.

Steve Brown quoted David Stiff, Fiserv’s chief economist:

“While prices continued to fall in most [U.S.] markets, sales activity picked up at the end of 2011, setting the foundation for price stabilization in 2012,” David Stiff, chief economist at Fiserv, said in the report. “We stand by our projection that average U.S. home prices will move sideways in 2012.

Stiff also thinks increasing sales activity will begin to drive small increases in prices in the U.S. metro areas that were not as hard hit by the housing bubble burst, places like Houston, Fort Worth and Salt Lake City. He’s saying Fort Worth can even expect price increases of 1 to 3 percent by the third quarter of this year. Gosh, let’s all move to Cowtown!

Nationally, not so good: home prices are forecast to decline 2.7 percent by the third quarter before rising a teeny bit in 2013.

U.S. home prices overall have taken a hit, losing about one-third of value since the market peaked in 2006.

Talking to Dallas agents, they say this isn’t surprising at all. Monday morning meetings at many brokers are now focusing on multiple offer transactions, the likes of which have not been seen since 2006 or 2007. With less inventory and more leasing, there are fewer homes available to sell. I have also started hearing of more FSBOs or For Sale By Owner. Two friends are working a deal now on a restored North Dallas ranch with a couple from out of town, and look at this lovely home pictured. I call this house the story of the Dallas real estate bubble. It sold June 15, 2007 for $2,750,000 with Cynthia Beaird at Allie Beth Allman, coming down from a high of $2.9. The last listing price was $1.9 with Jan Baldwin of Briggs Freeman Sothebys. The owners took it off the market in frustration, no offers. It sold in ten days right after the New Year. The buyers lived near the neighborhood, literally came knocking on the door I’m told.  Correction: It was listed March 24 of 2011, taken out of MLS on June 30  — how hard does that make selling a home? But two Briggs Freeman Sotheby’s agents persevered. The buyers, who happened to be neighbors, popped into an Open House at Lisa Besser’s listing at what was once Darryl Johnston’s house on Northaven, across the street. It’s now a foreclosure. They looked, said this was not their fancy, described what they want. You want across the street, said Lisa, who took them right over to see Jan’s listing. They were sold, closed and out in ten days. It’s stories like this that are getting everyone downright giddy about spring.

Our glorious fourth quarter of 2011 showed more national declines in home prices.

Data through October 2011 showed decreases of 1.1% and 1.2% for the 10- and 20-City Composites in October vs. September. Nineteen of the 20 cities covered by the indices also saw home prices decrease over the month, even San Francisco!

Grrrrreat.

“There was weakness in the monthly statistics, as 19 of the cities posted price declines in October over September,” says David M. Blitzer, Chairman of the Index Committee at S&P Indices. “Eleven of the cities and both composites fell by 1.0% or more during the month.

Guess who did not: Dallas. Our home prices are down a mere .01 percent over September, 2010, seasonally adjusted.

Prices increased in 4 of the 20 Case-Shiller cities in October, seasonally adjusted (which means taking into account/balancing higher volume buying seasons). Those cities would be Washington D.C., Charlotte, Atlanta and Denver. Prices in Las Vegas are –ouch —  off 61.3% from the boom peak, and prices in Dallas only off 8.8% from the peak, a.k.a.good old days.

Here’s the bad news: even using the seasonally-adjusted data, the Case-Shiller indexes are now at new post-bubble lows! And it could go lower.

Here’s the good news: if you are reading this, you probably own or are about to own property in Texas. Could it go lower here? Maybe. Not too much, just looking at how well our values have held up for the last three years.

Then take a look at this. Guess who’s been having a real estate boom right under our noses: why, Austin and San Antonio!

Austin, says the Business Insider, has gotten to be way expensive, especially for all the young musicians moving there. But despite the high cost of living, more than 170 new people still move to Austin every day. Consequently, Austin has become the most expensive city in Texas to buy or rent a home in. And, as I may have told you this summer, luxury real estate is booming in San Antonio.

Thanks to wealthy Mexicans and Eagle Ford Shale millionaires helping drive, the market for luxury real estate in San Antonio is outperforming the nation’s housing market. Like a blast from the past, you can still find million-dollar spec homes in the Alamo City. While median home prices across San Antonio are up about 2 percent for the whole year, prices are up 3.3 percent in the $750,000-and-up category.