Today, more data was added to the pile of proof that a housing recovery is indeed under way.
The Case-Shiller Home Price Index, which covers roughly half of U.S homes, showed that prices rose again during September — their sixth consecutive monthly increase.
For the 20-city composite index, prices gained 3% year-over-year vs. a 2% gain in August. Only Chicago and New York suffered annual declines, and even Atlanta — where prices have fallen for 26 straight months — posted a slight increase.
As David Blitzer, chairman of the index committee, put it: “It is safe to say that we are now in the midst of a recovery in the housing market.”
Let’s take a look at the 10 cities in the composite index with the largest annual gains in prices this September:
10. San Diego
YOY Increase: 4.1%
In San Diego, prices posted a 1.4% gain in September from the month prior, and were 4.1% better since the same time in 2011.
While the month-over-month growth lagged behind August’s, the one-year increase was a significant improvement from the month before — more than double August’s 1.9% gain.
The rise in prices, though, might not actually be because of a strong housing market. Instead, there is talk that San Diego’s real estate inventory is “dangerously low” — a reality that is bad news for the industry’s recovery prospects.
YOY Increase: 4.4%
The one-year gain in home prices down in Dallas was stuck at 3.6% in July and August. In September, though, it made progress, improving to a solid 4.4%.
Things got even better month-to-month as well, with prices gaining 0.2% from August to September — double the slight gain the city enjoyed from July to August.
Real estate experts in Dallas still are optimistic about the recovery, pointing to the falling number of foreclosures, fewer homes on the market and low mortgage rates.
YOY Increase: 4.8%
Home prices in Seattle rose even more in the year leading up to September — 4.8%, to be exact. That set a new post-bubble record, as The Seattle Times put it, erasing the previous high of 3.4% posted the month prior.
The climb also made for the fifth straight year-over-year increase for the area. Plus, prices gained 0.3% month-over-month, more than offsetting the 0.1% fall in prices the city saw from July to August.
7. Tampa, Fla.
YOY Increase: 5.9%
Down in sunny Tampa, home prices were flat from August to September but still increased by just less than 6% over the entire year. That’s 1.7 percentage points better than the one-year change reported in August.
Part of the reason for the long-term rise in prices could be low home inventory in the area. Back in August, for example, foreclosures and low home sales combined to send inventories to a record low.
YOY Increase: 6.7%
Out in Denver, prices posted a 0.4% gain in September from the month prior, contributing to the city’s 6.7% improvement since the same time in 2011.
While the month-over-month growth slightly lagged behind August’s 0.5% increase, the one-year gain was better than the month before.
More good news came out of Denver in the third quarter. The number of resales increased by 15% year-over-year, for example, while the average number of days on market fell by a whopping 37%. On top of that, inventory fell by 11% — more than three times the decline in the rest of the state, according to the Denver Business Journal.
YOY Increase: 7.4%
Miami experienced a 6.7% one-year gain in August and increased its home prices even more in the year leading up to September — 7.4%, to be precise, landing Miami in the top five.
Plus, that gain came despite the fact that, month-over-month, prices only rose 0.1%.
A recent report by the Miami Association of Realtors supported a strengthening housing market in Miami, citing surging residential sales despite low inventories, along with a falling number of days on market for single-family homes and condominiums.
4. San Francisco
YOY Increase: 7.5%
We’re back in California for our next city. San Francisco edged out Miami for the fourth spot with its one-year increase of 7.5%. That also beat out the area’s 5.3% gain in the year leading up to August.
Prices gained 0.5% month-over-month, matching the increase enjoyed the month prior.
While San Francisco only barely missed the top three, the area has plenty to smile about. The city also took the crown for best housing market in terms of three different statistics in September: median list price, percent distressed and median days on market.
YOY Increase: 7.6%
Things sure aren’t pretty in Detriot, but prices are at least rising at a steady rate. They gained 7.6% year-over-year in September — the same gain posted the month before.
The month-over-month improvement slowed significantly, though, going from 2.5% in August to only 0.7% in September.
On top of that, while we mentioned that fourth-place San Francisco had many signs of a being the best market during that month, Detroit showed several signs of being the worst. More specifically, it was the worst area in terms of median list price, percent distressed and median per square foot. Prices might be going up, but that sure isn’t saying much.
YOY Increase: 8.8%
Up in Minneapolis, prices posted a 1.1% gain in September from the month prior, contributing to the city’s 8.8% gain over the year leading up to that. That’s 1.4 percentage points better than the one-year gain enjoyed in August.
The story here is much the same as in other cities on the list. The inventory of available homes has been shrinking in Minneapolis as well and sat at their lowest level in nine years back in August.
YOY Increase: 20.4%
Blowing all the other cities out of the water is none other than Phoenix, which boasted an eye-popping 20.4% one-year gain from September 2011 to September 2012.
Of course, Phoenix led the way in August as well with an unmatched 18.8% gain. Its month-over-month rises in prices have consistently been near the top of the list, too.
It’s not all good news for housing in Phoenix, though. Earlier in the month, the city was No. 5 on our list of Top 10 Cities Underwater on Mortgages in Q3. Still, AZ Business Magazine maintains that an increase in manufacturing and the purchase of homes by investors has helped the area tremendously — and this double-digit rise in prices seems to agree.