Home prices are rising by every measure, including in the latest data from Case-Shiller measuring price trends in 20 major metro markets. The price index accelerated to two percent appreciation from one year ago as of August. The gain had been 0.6 percent in June and 1.1 percent in July. The upward momentum is clearly developing.
Case-Shiller is a lagging indicator. November is just a day away, yet Case-Shiller is stating the obvious about what happened in June, July, and August (because August data is not clean one month data, rather a three-month moving average to August). Based on what is already known about September and October regarding further falling inventory trends, it is inevitable that Case-Shiller’s price index will show an even faster price appreciation in the upcoming months. Even if we encounter an unrealistic scenario of no monthly price change from now to the end of the year, Case-Shiller will have reported 4.3 percent home price appreciation from December of last year to December of this year. If home prices rise by 0.5 percent per month from now to December, matching the monthly average so far this year, then the December-to-December home price appreciation will be 6.4 percent.
Locally, Phoenix is flying, with a price increase of 19 percent in August from one year ago. Minneapolis and Detroit are also coming back quite strongly, with both notching better than seven percent price appreciation. Atlanta was at the bottom of the pile with a six percent lower price from one year ago. However, Atlanta hit absolute low in March of this year and the price has been rising fast since then, a solid 16 percent in five short months. Do not be surprised if Atlanta becomes the next Phoenix in the near future.