In February home prices in the 20 largest U.S. cities saw the largest increase since before the Bush recession. The S&P/Case-Shiller index of property values released Tuesday showed that in 20 cities home prices rose 9.3 percent from February 2012. This was more than experts predicted This follows an 8.1 percent in the year that ended in January. Compared with the prior month, prices rose the most since October 2005.
Estimates for the year-over-year price change ranged from increases of 8.5 percent to 9.3 percent, according to the 27 economists surveyed. The Case-Shiller index is based on a three- month average, which means the February figure was influenced by transactions in January and December.
In February 2013, the number of cities that posted positive monthly changes increased; Boston, Dallas, New York, Portland and San Diego are now among the MSAs posting month-over-month gains.
All 20 cities say year-over-year increases
Even though eight MSAs posted monthly declines, all twenty cities showed increases when compared to their February 2012 levels. Atlanta, Detroit, Las Vegas, Los Angeles, Miami, Minneapolis, Phoenix, San Diego, San Francisco and Tampa were the ten MSAs that continued to report double-digit year-over-year gains. San Diego and Tampa recorded their first months of double-digit annual increases of just over 10.0%
“Home prices continue to show solid increases across all 20 cities,” David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices said in the press release. “The 10- and 20-City Composites recorded their highest annual growth rates since May 2006; seasonally adjusted monthly data show all 20 cities saw higher prices for two months in a row – the last time that happened was in early 2005,” he added..
The cities with the largest year-over-year increases were Phoenix (+23%), San Francisco (+18.9%), Las Vegas (+17.6%), Atlanta (16.5%), and Detroit (+15.2%). Atlanta recovered from a wave of foreclosures in 2012 while the other three were among the hardest hit in the housing collapse. At the other end of the rankings, three older cities – New York, Boston and Chicago – saw the smallest year-over-year price improvements.
The housing sector continues to be the bright spot in the economy. In the first quarter of 2012, residential investment increased over 2012. Housing sales are depleting inventories and that is leading to an uptick in home building, which is helping overall employment figures.
Home prices restoring wealth lost in recession for some
The increase in housing prices has restored over half of the wealth lost by homeowners in the Bush recession. However, the only ones recovering their wealth are the families who were lucky enough to keep their homes in the face of the massive foreclosure crisis. The foreclosure victims are out of luck.
Many of those families were victims of predatory lending practices. Others were wrongly foreclosed on. The victims lost the banks got a mild slap on the wrist and their executives got huge bonuses. Where is the justice?
They say a rising tide raises all boats. If housing lifts the economy, perhaps the foreclosure victims will benefit indirectly.
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