Annual Home Price Gains Through August 2013 Sets Post-Crisis Record

The S&P/Case-Shiller Home Price Indices rose once again in August at their fastest annual rate in more than six and a half years, but the monthly pace continues to slow.

The Case-Shiller 10- and 20-city composites each posted yearly growth of 12.8 percent over August 2012, breaking July records and setting the fastest pace for growth since February 2006. Compared to July’s indices, annual growth accelerated in 14 of the tracked cities. All 20 cities experienced price growth compared to last year, and 13 reported double-digit gains, with Las Vegas leading at 29.2 percent—its fastest rate of growth since March 2005.
Monthly numbers were slower, with both composites seeing a 1.3 percent increase—indicating prices may be approaching a plateau. “The monthly percentage changes for the 20-City composite show the peak rate of gain in home prices was last April. Since then home prices continued to rise, but at a slower pace each month. This month 16 cities reported smaller gains in August compared to July,” said David M. Blitzer, Index Committee chairman at S&P Dow Jones Indices. “Recent increases in mortgage rates and fewer mortgage applications are two factors in these shifts.”
All cities posted monthly improvements over July; again, Las Vegas set the pace at 2.9 percent, with Seattle sitting at the bottom at 0.5 percent. As of August, average home prices across the nation are back to their mid-2004 levels. The current peak-to-decline for both composites (measured from mid-2006) is an estimated 20-21 percent. Compared to February-March 2012—when prices bottomed out nationally—the 10- and 20-city composites have recovered 22.1 percent and 22.7 percent, respectively.
Denver and Dallas, two markets that have come out of the crash and subsequent recovery ahead of most others, again set new highs for their indices at values of 146.95 and 132.30, respectively. Though Dallas was not one of the 13 cities reporting double-digit returns, it did see its highest annual gain since its index was first published in January 2000. All other cities remain below their peaks, though Boston and Charlotte are closing in with less than 10 percent left to make up, Blitzer said. Despite encouraging numbers in August, Las Vegas is down 47.1 percent from its peak.

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