Home prices rise 3.1 percent in Twin Citiesby Annie Baxter, Minnesota Public Radio
St. Paul, Minn. — The closely-watched Standard & Poor's/Case-Shiller National Home Price Index shows Twin Cities home prices jumped 3.1 percent on a seasonally-adjusted basis. On a non-adjusted basis the jump was an even bigger 4.6 percent.
Among the 20 metro areas the index tracks, the Twin Cities had the largest monthly jump in home prices.
San Francisco and Chicago also saw big monthly gains.
The overall index posted its third consecutive monthly gain. David M. Blitzer, Chairman of the Index Committee at Standard & Poor's.
"These figures continue to support an indication of stabilization in national real estate values," said David M. Blitzer, Chairman of the Index Committee at Standard & Poor's.
Jeanne Boeh, economics professor at Augsburg College, said despite the improvement, many homeowners owe more than their houses are worth. And Twin Cities home prices in July were still down significantly, 17 percent, compared to a year ago.
"So the question is, what happens to the housing market as the jobless rate continues to go up, and people's housing values are still below what they were a year ago," said Boeh.
Boeh also says the housing market could take a further hit when the first time homebuyer credit expires December 1st.
July data reported by Twin cities area realtors associations showed the median price of a home dropped 1 percent in July. But the two reports are calculated in different ways.
The realtors report the midpoint among all the sale prices. This method is vulnerable to swings based on what kinds of homes are sold. The median price can be pushed up if few low cost homes are sold, and edges down if lower-priced homes make up a big portion of sales.
The Case-Shiller method attempts to eliminate the influence of "mix." The index identifies all the homes that sold in the month. Then officials hunt through the records to find the previous time each house sold, and calculate the change in price.
Often, the Case-Shiller index has indicated prices are declining, when the numbers from realtors show the opposite.
"I will say it's a novel experience to have realtors tell us our prices are too good, not too bad," said Blitzer. "They don't call directly, they ask journalists to put the question to us, 'how can they be so negative and so on.' So it's a pleasant change to have us be slightly up and them be slightly down."
- All Things Considered, 09/29/2009, 5:20 p.m.