Showing posts with label Case Shiller seasonaly adjusted growth. Show all posts
Showing posts with label Case Shiller seasonaly adjusted growth. Show all posts

Tuesday, February 24, 2015

House Prices grew 10% last quarter

House price Upsides
The following chart illustrates the seasonally adjusted Case Shiller 20 city index for December closings the bulk of which were negotiated in November.  Prices fell sharply in the April closings negotiated in March because of the last year’s winter storms which lowered personal income.  Prices began to improve with the August closings. The three month moving average is now at 10.5%, well above the year over year growth of 4.5%.  A quarter of data at 10.5% is highly significant.

Should the next three months grow at an annual rate of 10% (0.8% month) the year over year average for the next three months will be: 4.5%, 4.3%, and 4.1%.  This decline is because the negative months are starting to impact the year over year calculation. Is this why David Blitzer says, “The housing recovery is faltering”?  It is for his favorite index, but not in the real world.

The following table compares the price growth of the third quarter closings to those in the fourth quarter. The 20 cities are grouped by cities that move in similar patterns. The order of the cities is based on the growth from the start of the bubble in 1997 to the peak in 2006. 



Case Shiller Surge
Annual  Price Growth



Percentage Point Change

3Q 2014
4Qt 2014
3rd to 4th Quarter
Los Angeles
0%
12%
12%
San Diego
-1%
6%
7%
San Francisco
-2%
18%
20%
TL California
-1%
12%
13%
Miami
4%
12%
7%
Tampa
2%
18%
16%
Las Vegas
3%
5%
1%
TL Resorts
4%
12%
8%
Washington
-5%
8%
13%
New York
-2%
6%
7%
Boston
-2%
8%
10%
Seattle
2%
10%
8%
TL Large Cities
-2%
7%
9%
Phoenix
1%
6%
5%
Minneapolis
-7%
7%
14%
Chicago
-9%
7%
16%
Portland
1%
10%
8%
Atlanta
2%
21%
19%
Detroit
-9%
10%
19%
TL Medium Priced Cities
-4%
10%
14%
Denver
5%
15%
10%
Cleveland
3%
6%
3%
Charlotte
4%
8%
4%
Dallas
7%
12%
5%
TL Stable
5%
11%
6%
Composite-20
-2%
10%
12%

The growth of the 20 cities went from -2% annual rates to 10% in the fourth quarter a difference of 12 percentage points. The salmon colored cities had the greatest improvement quarter to quarter. San Francisco improved to 20 points, not surprising with the high tech successes in this city.  But the next two cities are unexpected. Atlanta and Detroit at a 19 point difference, both of these cities are low priced and were hit hard by the recession so catch up is to be expected.  Chicago at 16 points is similar. Tampa at 16 points is a lower priced city than Miami.  Resort cites typically grow rapidly in a recovery and both Miami and Los Vegas  saw good growth in the third quarter so forth quarter growth is good. 
  
New York’s is an expensive city with slow growth so a 7 point swing is reasonable. Cleveland, Charlotte and Dallas are low priced cities with stable prices, much like most cities outside the Case Shiller Index. 

As usual the outlook for house price appreciation varies significantly by region.