Metro Home Prices: Down in July, Up From Last Year

On a seasonally adjusted basis, Twin Cities home prices posted one of the highest decreases among 20 U.S. metro areas tracked; but without adjusting for seasonality, the average home price rose 0.8 percent, representing one of the highest increases.

Home prices in the Twin Cities metro area decreased 1.2 percent from June to July-representing one of the highest decreases among 20 metro areas tracked by Standard & Poor's/Case-Shiller Home Price Index.

The seasonally adjusted 1.2 percent decline is notably worse than the national average decrease of 0.1 percent between June and July. However, without adjusting for seasonality, the Twin Cities' average home price rose 0.8 percent between June and July, representing the fifth-highest increase among the 20 metro areas.

On a seasonally adjusted basis, New York posted the highest month-over-month home price increase (1 percent), while Phoenix experienced the largest decrease (1.7 percent).

The Home Price Index-an industry standard that lags two months-uses a base value of 100 from January 2000. The Twin Cities had an index of 127.01 for July, meaning that the average home has appreciated about 27 percent within the past 10-and-a-half years. The composite index for the 20 major U.S. markets tracked was 148.91 in May-substantially higher than the Twin Cities' index.

Year-over-year, however, Twin Cities-area home prices have posted a 6.4 percent increase-representing the fifth-highest jump among the 20 areas tracked. San Francisco experienced the most substantial increase (11.2 percent) during that time, while Las Vegas experienced the largest decrease (4.9 percent).

Housing experts have been expecting home price declines following the expiration of the federal tax credit for first-time homebuyers, which required that a binding sales contract be signed by April 30 and that the purchase be completed by September 30. During the past several months, housing prices in many U.S. cities were higher than usual because of people wanting to take advantage of those credits before it was too late.

“While we could still see some residual support from the homebuyers' tax credit, which covers purchases closing through September 30th, anyone looking for home price to return to the lofty 2005-2006 might be disappointed,” David M. Blitzer, chairman of the index committee at Standard & Poor's, said in a statement. “Judging from the recent behavior of the housing market, stable prices seem more likely.”

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