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Case-Shiller: Home prices rising in the Twin Cities, but still far from peak

The Case-Shiller house price index going back to January 1989.

The Case-Shiller house price index going back to January 1989.

After one of the strongest spring housing markets in several years in the Twin Cities and beyond, all eyes are on house prices, which by some measures have returned to, or exceeded, pre-crash levels in some parts of the metro. The S&P/Case-Shiller Home Price Indices released Tuesday morning shows that prices across the 13-county metro are posting healthy, moderate gains, but are still far from peak.

During April, the index rose increased 3.19 percent to 142.78. That year-over-year gain is slightly below the national average, but consistent with previous increases for the Twin Cities. What's more telling is that the index is still nearly 28 points below the September 2006 peak, but 34 points higher than post-crash low of 109.

The Case-Shiller report, which tracks repeat sales of the same house using public records, suggests that house prices in the metro have much farther to go than a monthly report from the Minneapolis Area Association of Realtors (MAA), which tracks the median price of all sales that are listed with a Realtor through the Regional Multiple Listing Service. The MAAR report shows that during May the median sale price was $224,000 compared with a previous high of $238,000 in June 2006. Statistically speaking, the median price in the metro is getting a lift becuase of change in the mix of what's selling. Deeply discounted foreclosures now represent only a fraction of all sales, with more expensive move-up houses taking their place.

We'll have the June sales data from MAAR on July 13. Though it's still a seller's market with buyers outpacing sellers in some parts of the metro, I don't expect the median price for June to exceed the 2006 high.

Minneapolis-St.Paul top Green Building Adoption Index for second straight year

Minneapolis-St. Paul does a better job creating energy efficient office buildings than any of its metropolitan peers, according to an annual index.

For the second year in a row, the Twin Cities topped CBRE's Green Building Adoption Index with more than 70 percent of all commercial office space holding a certification from either the Environmental Protection Agency's Energy Star program or the U.S. Green Building Council’s LEED standard. 

The 2015 National Green Building Adoption Index ranks the top 30 U.S. markets based on two percentages: the total number of office buildings, and total office square footage.

More than 70 percent of all office space in Minneapolis-St. Paul is certified by one of these programs. That's the highest in the nation and nearly twice the national average of 38.7 percent. San Francisco trailed the Twin Cities by less than half of a percent.

This brings up an interesting, albeit not surprising, factor. The larger the building, the more likely that the owners and managers are to seek certification. Nationally, more than 63 percent of buildings over 500,000 square feet are certified. This progressively drops off the smaller the building's footprint. For instance, less than 5 percent of buildings under 100,000 square feet nationally are certified.The local market did worse on the percent of buildings certified, 28 percent, but is still well above the national average, which hovers just above 13 percent. 

The study's authors note competition for the best and brightest talent being a driving factor for companies.

"With 18 Fortune 500 companies located in the Twin Cities, competition is fierce to attract and retain the best young talent. Knowing that this young talent is passionate about the environment, many of these companies strive to occupy green buildings," the study says.

Building owners have to respond to the market's demands, which is why a number of Class A office buildings have transitioned to more energy-efficient methods. Examples include Capella Tower, Wells Fargo Center, 33 S. 6th Street and Campbell Mithun Tower.

Limitations of the study:

- Some owners choose not to renew their building's certificate due to cost. This means that some highly efficient buildings may not be counted in the rankings.

- The study only captures commercial office buildings, leaving out all government owned and occupied, and medical buildings.