House prices in the Twin Cities metro posted a 4.8 percent increase during November, according to the latest S&P/Case-Shiller home price report. For the Twin Cities, it was a better-than-average gain, but it was slighly below the national average of 5.3 percent.
That puts house prices about 30 percent above a 2012 trough and still slightly below peak, again almost precisely the same gain as the national average.
The report (click here to see all of the data) is based on repeat sales of the same property using public records. That's a contrast to data from the Minneapolis Area Association of Realtors (MAAR), which tracks the median price of all sales during the month. We'll have a January snapshot of the market from MAAR on February 12. Based on early indications, sales during the month are expected to show unusually strong gains in home sales and price gains.
In the meantime, here's reaction to today's Case-Shiller report:
David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P Dow Jones Indices: “Home prices extended their gains, supported by continued low mortgage rates, tight supplies and an improving labor market....sales of existing homes were up 6.5% in 2015 vs. 2014, and the number of homes on the market averaged about a 4.8 months’ supply during the year; both numbers suggest a seller’s market. The consumer portion of the economy is doing well; like housing, automobile sales were quite strong last year. Other parts of the economy are not faring as well. Businesses in the oil and energy sectors are suffering from the 75% drop in oil prices in the last 18 months. Moreover, the strong U.S. dollar is slowing exports. Housing is not large enough to offset all of these weak spots.
Quicken Loans vice president Bill Banfield: “Home prices rose in November, pushed by stubbornly-low home inventory as sellers still wait on the sidelines. While owners enjoy seeing the value of their investment grow, some markets are running into an affordability problem – especially with areas in the west seeing double-digit yearly price growth.”