Real Estate Market Commentary - November 2013
by Peter L. Zachary, MAI, MRICS
An article in the October 29th issue of the New York Times was entitled “Home
Prices Rise at Fastest Pace Since 2006.” It said:
“U.S. home prices rose in August from a year earlier at the fastest pace
since February 2006. But the price gains slowed in many cities in July, a sign that
the spike in prices over the past year may have peaked.
The Standard & Poor’s/ Case-Shiller 20-city home price index rose 12.8 percent over the 12 months ending in August. That’s up from 12.4 percent in July
from a year earlier. All 20 cities showed year-over-year gains.
However, a measure of month-over-month prices for the 20 cities rose just 1.3 percent in August. That’s down from 108 percent month-over-month gain in
July and 16 of the 10 cities reported more modest price increases in August than
Greater demand and a tighter supply of homes for sales have helped drive
prices higher over the past year. But over the summer, mortgage rates jumped
from their record lows. And weaker job growth is also discouraging potential
Prices in Las Vegas rose 29.2 percent from a year earlier, the fastest pace
in the nation. But they are still 47 percent lower than they were before the
housing market collapsed.
Prices in Denver and Dallas hit record levels in August. None of the other
cities have returned to where they were before the real estate collapse. Average
home prices are only back to mid-2004 levels and 22 percent below their April
And many of the cities are seeing their gains slow.
Prices in San Francisco increased 0.9 percent in August, down from 2.2.
percent monthly increase in July.
Despite rising for 26 straight months, prices in Detroit are still lower than
they were in January 2000.
Ellen Haberle, an economist with the national real estate brokerage
Redfin, said that prices have been driven higher by a limited supply of houses on
the market. She expects home sales to fall in September and October partly
because the federal government shutdown likely scared off potential home
Contingent Macro Advisors economists Maninder Sibia and Steven Wood
said housing inventory was only 83 percent of normal levels. They expect the
supply to increase as rising prices encourage home owners to put their house on
The Case-Shiller 20-city index covers roughly half of U.S. homes. It
measure prices compared with those in January 2000 and creates a three-month
moving average. The August figures are the latest available. They are not
adjusted for seasonal variations, so the monthly gains reflect more buying activity
over the summer.”
More to come next month. Read previous Real Estate & Housing Market News.
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