Home prices show first year-over-year increase since 2010
There’s new evidence that property values may be ending their six-year swoon.
Home prices posted their first year-over-year increase since the summer of 2010, when they were temporarily buoyed by Washington’s tax credit on home purchases.
The S&P/Case-Shiller Index — one of the most watched measures of how property values are doing — tracks prices nationally and in 20 major cities.
From June 2011 to June 2012, it found prices increased 1.2% nationally and 0.5% in those 20 cities.
This is the second straight month that gains have been reported on prices in the 20 tracked cities, with 13 of the 20 cities posting year-over-year increases (based on non-seasonally adjusted data).
Phoenix was one of the hardest-hit cities in the collapse, but it has been consistently gaining, at least over the last two indices.
In last month's index, Phoenix saw the biggest annual gain in the period from May 2011 to May 2012 (11.5%), and it also saw the biggest annual improvement in this month's index, up 13.9% since June 2011.
Minneapolis (5.7%) and Miami (4.4%) came in second and third with the highest gains this month.
Atlanta continues to suffer the largest annual rate of decline, down 12.1% from June 2011, but prices were up 4.4% in Atlanta from May to June 2012.
"Only two cities — Charlotte and Dallas — saw annual rates of change worsen in June," notes David Blitzer, chairman of the Index Committee at S&P Dow Jones Indices.
Prices throughout the nation fell drastically when the bubble burst in 2007, but the housing market rebounded in 2009.
Since that rebound in 2009, the S&P/Case-Shiller Composite Index has bottomed out three times, with each previous upswing cut short by another decline.
The current rebound, which started in February, has pushed prices back to where they were in early 2003.
Although they are still down about one-third from their peak in 2006 there’s growing optimism that property values won’t falter again.
"We seem to be witnessing exactly what we needed for a sustained recovery, monthly increases coupled with improving annual rates of change. The market may have finally turned around," Blitzer said.