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Case Shiller Home Prices: Further Gains

December 29, 2020
Bottom Line:  As housing activity continued well into the Fall, price increases accelerated in many markets.  Home prices nationwide rose for the third month in a row in October after several months of flat prices in the immediate wake of the pandemic.   While some urban areas remain weak, the increased demand for less dense, single-family housing has led to higher prices. It is important to note that these data measure the "metropolitan statistical area," typically composed of a large geographic region around a city, typically including all of its major suburbs.   October saw further gains for the hot markets like San Diego and Seattle, but also solid gains in markets like Boston, Cleveland, New York, and Chicago that had been lagging.  
Overall, expect more dispersion and volatility in prices across regions and within regions as the pandemic likely marked a structural shift in demand towards single-family, suburban housing after a multi-decade trend towards re-urbanization and multi-family housing.  On the net at the national level, the demand shift appears to be accelerating the price of gains in housing, likely pushing it significantly above the pre-pandemic trend of  2-3% annualized gains for at least a few more quarters. 
Case Shiller 20-City Home Price Index ROSE by 1.61% (seasonally adjusted) in October to 235.5, compared with market expectations for an increase of 1.0%.  Home prices are 7.9% ABOVE their year-ago level.
On a non-seasonally adjusted basis, the home price index ROSE by 1.3% on the month.                                            
Housing prices rose in 19 of the 20 metro areas in October (on a seasonally adjusted basis) and in 20 of 20 metro areas on a year-over-year basis.                                                                                        
Detroit had the smallest year-over-year increase at 1.7% while Phoenix had the largest year-over-year increase at 13.3%.