After some encouraging housing and employment data in recent months, optimism about a budding housing recovery was dealt another blow Tuesday on news that home prices dipped in October. After incremental bumps earlier this year, home prices in 19 of the 20 markets the widely followed S&P/Case-Shiller Home Price Index saw month-over-month decreases according to the latest data.
But as the year draws to a close, month-over-month data isn't always the best barometer of individual housing market performance. And while annual numbers overall slid more than 3 percent, 14 of the 20 markets tracked saw their annual rates of change improve.
"In 2008 and 2009, it was a national housing market. Everything was collapsing together," says David Blitzer, chairman of the Index Committee at S&P Indices. "One thing that's happened in the past couple of years is that it's going back to being more of a local market phenomenon."
"The old adage 'location, location, location' is coming back to have a lot of meaning. Three years ago it didn't matter where you were looking at housing in the United States, prices were collapsing," Blitzer adds. "Now when you look around the country, you find some differences."
S&P sliced and diced price data over the past several years and came up with some market-specific numbers to answer what most homeowners want to know: "How is my city's housing market doing?"
Here's a look at the top 10 markets with the biggest rebounds from price lows according to S&P's HousingViews blog:
|San Francisco, Calif.|
|San Diego, Calif.|
|Los Angeles, Calif.|
Source: Standard & Poor's HousingViews
The common theme among many of these metro areas is that they don't have the same issues with overbuilding and foreclosures as some of the Sun Belt states do. Phoenix and Las Vegas will continue to struggle with a massive oversupply of homes, Blitzer says, while California—which has relatively strict building codes—saw less rampant overbuilding, which has worked to its benefit.
Nevertheless, home prices changes aren't a city-by-city contest as much as a reflection of the local economic conditions of a particular metropolitan area. Washington, D.C., has the federal government to thank for a strong employment outlook, and while the auto industry certainly isn't booming in the Motor City, it is stabilizing, according to experts.