A strong report for the Twin Cities from the June Case-Shiller report
- Blog Post by: Jim Buchta
- August 27, 2013 - 10:08 AM
The price of single-family homes across the country posted a healthy boost during June, but the pace of those gains eased a bit during the month, according to a monthly S&P/Case-Shiller composite index of 20 metropolitan areas.
The 20-city composite showed a 2.2 percent gain from May to June and a 12.1-percent gain over last year with monthly and annual gains in all 20 cities that are part of the composite. Only six regions, including the Twin Cities metro, showed an increase in the month-to-month gain. That's compared with ten cities during May, suggesting that the recovery is beginning to moderate. From May to June the index was up 2.3 percent in the Twin Cities compared with a 2.1 percent increase from April to May, and slightly ahead of the national average.
On annual basis, the Twin Cities index was up 11.5 percent, slighty lower than the national average. The report comes at a time of mounting evidence that the recovery, while robust, is beginning to cool a bit - mostly because of a recent increase in higher mortgage rates. On Friday, for example, a report showed that sales of new homes across the country had begun to cool. The real of impact of those higher rates, which are still below a historically low 5 percent for a 30-year fixed-rate mortgage, is not likely reflected in Case-Shiller's June report, which is based on a rolling three-month average that includes only a portion of higher-rate environment.
In other Tuesday housing news,CoreLogic said that the foreclosure rate in the Twin Cities was just 1 percent during June, a decline of 0.72 percentage points compared with last year and well-below the national average of 2.49 percent. The number of people who were 90 days or more behind on their mortgage and headed towards foreclosure was also down, falling to 3.13 percent from 4.34 percent last year.
And finally, the University of St. Thomas Residential Real Estate Price Report Index showed that frm June to July the median sale price in the Twin Cities metro declined for the first time this year. Herb Tousley, director of real estate programs for the Shenehon Center for Real Estate at the University of St. Thomas' Opus College of Business, said the decline is no cause for concern. He attributed the decline to a normal seasonal slow-down and a change in the mix of what's selling. The proportion of foreclosures and short sales fell to the lowest level since January 2008, causing a statistical shift in the median price. From June to July the median sale price of all closings in the metro was down 2.7 percent.
Here's the really telling nugget: The median price of a non-distressed (foreclosures and short sales) homes was $224,950, up 3.7 percent from last year, but only 6.2 percent lower than the all-time high of $239,900 recorded in June 2006.
Tousley also noted that the Twin Cities was one of the two-20 markets in 2012 for new home starts. after five years of declining values and an overhang of inventory, the condo market is on the rise.
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