Nationwide gains marked a strong finish for home prices in 2012, according to data released by S&P/Case-Shiller Home Price Indices. But while the market is making a recovery, the strongest numbers may have already been seen, S&P says.
Data through December 2012 showed home prices were up 7.3% when compared to the previous year, the increase boosted by near-unanimous annual gains from the index’s composite cities.
The 10- and 20-City Composites reported annual returns of 5.9% and 6.8% in 2012.
Month-over-month, both composited headed into positive territory with gains of 0.2%, which S&P claims more than reversed last month’s losses.
Of the 20 metropolitan statistical areas (MSA), 19 posted year-over-year growth. New York was the only area to fall.
“Home prices ended 2012 with solid gains,” said David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices. “Housing and residential construction led the economy in the 2012 fourth quarter.”
Even when sessionally adjusted, there were no declines across all 20 cities, claimed Blitzer.
Despite the strong close out for the year, the future might hold more modest gains.
“The 10- and 20-City Composites, which bottomed out in March 2012 continued to show both year-over-year and monthly gains in December,” said Blitzer. “These movements, combined with other housing data, suggest that while housing is on the upswing some of the strongest numbers may have already been seen.”
Given the substantial increase for the year, home prices as of the fourth quarter of 2012 are back at their Autumn 2003 levels, notes S&P.
When measured to their June/July 2006 peaks, the decline for both composites is approximately 30% through December 2012, however, the last year’s fourth quarter levels are 8%-9% higher than their recent lows seen in March 2012.
Written by Jason Oliva