They may be talking Fiscal Cliff in D.C., but you can only say good things about our housing market unless, that is, you live in Chicago. Or New York. The Standard & Poor’s/Case-Shiller Index shows home prices continued to rise in October, with prices up 4.3% annually within the 20-city composite index that S&P scrutinizes for us.

Why October? Because right now, in December, that is the latest month that has all the documentation in and complete from the recording offices across the nation.

S&P says it’s a “sustained recovery” in home prices, and S&P does not fool around. I heard Robert Shiller speak in 2009 and he was Debbie Downer when it came to housing then. S&P is not the only research firm calling for the bubbly. Lender Processing Services says that pre-owned housing prices are now up 4.3% year-over-year in October. In September the index was up 2.1%; it showed a 3.4% annual gain in October.

Poor Chicago and New York were the only cities with negative home price returns for October. September was a better story:

“The five MSA’s where home prices fell in October but not in September were Atlanta, Dallas, Miami, Minneapolis and Seattle”

David Blitzer, chairman of the index committee at S&P Dow Jones Indices, says housing is gaining strength. The strongest performances are in the southwest and California, like Phoenix where homes were selling for a quarter on the dollar just a few years ago.

Over the holidays, I met a delightful Phoenix transplant to our region who told me they had no problem selling their home to move here.

And again, we hear what I have preaching to you since Day One: real estate is a LOCAL story. You have to look at individual markets which show us how high we’ve come from the bottom pits of 2008/2009. And right now, even old, icky stuff is moving in Dallas,

See this treasure? It was vacant for more than 22 years in Oak Lawn Heights, Rob Elmore of the crack Garrey & Elmore team at Keller Williams got six offers in two days and closed in under thirty days… for 98% of list.

Dallas home prices were up 4.6% over October 2011, with a few gyrations there in September and October that I don’t really care about because I know how busy everyone is selling.

Blitzer almost seemed to say that our market is “normal”, like it was pre-steroidal market:

“San Francisco and Phoenix have also rebounded from recent lows by 22.5% and 22.1% with prices comfortably higher than 12 years ago,” said Blitzer. “The smallest recoveries are seen in Boston and New York, two cities in the northeast which suffered smaller losses in the housing bust than the Sunbelt or California.”

I’m just going to say it: is this administration trying to KILL OFF the U.S. housing market?

By now, if you are in the real estate business, you are thinking about serious drinking. Save the calories if you live in Dallas: we did OK. Not great, but OK. The S&P/Case-Shiller report says overall, the nation’s home prices spiraled downward at the end of 2010, even as the rest of the economy gained steam.

National home prices fell 4.1% during the last three months of 2010, compared with 12 months earlier. They were down 1.9% compared with three months earlier.

“Despite improvements in the overall economy, housing continues to drift lower and weaker,” said David Blitzer, spokesman for S&P.

And things may get a lot worse, said Robert Shiller, a Yale economist and half of the Case-Shiller team, in a telephone/web conference after the report’s release.

“There’s a substantial risk of home prices falling another 15%, 20% or 25% more,” he said.

Good Lord, did he say 25% more?

Shiller is referring to talk out of Washington about the government limiting and reducing its presence in Fannie Mae and Freddie Mac, the GSEs that guarantee about three-fourths of the loaning going on right now. Add in that talk of saying goodbye to the mortgage interest deduction — all this threatens home values. Private mortgage money will have to cover most home loans and banks don’t lend money to be nice, they do it to make money. Lending costs will increase which will further hurt home prices.

I know we need to ease out of the GSEs, but baby steps!

So should you buy or wait? I honestly think it’s six to one-half dozen: prices may fall further, but borrowing costs and interest rates could more than make up the difference. If you’re a cash buyer, this is your year.

But Dallas, God bless Dallas. Dallas was listed as one  of six cities that showed an improvement in annual growth rates in December as opposed to November, 2010. And we stayed above our price lows from February 2009. How can we ever forget that was the month when everything cratered!

Problem is, even our treading water here, which is great, is going to be splashed over by all the negative national news.¬† Just keep thinking those positive thoughts, pray that the Middle East calms down and the price of oil doesn’t sky-rocket.

Like the builder I was with today said, this spring market has got to be good! Of course, high oil prices sometimes benefit Texas.

I’m off to church!

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Good morning.

At 9am EST today, S&P Indices released the year-end results of the S&P/Case-Shiller Home Price Indices. Data through December 2010 reveals the following:

  • The U.S. National Home Price Index declined by 3.9% during the fourth quarter of 2010.
  • The National Index is down 4.1% versus the fourth quarter of 2009, the lowest annual growth rate since the third quarter of 2009 when prices were falling at an 8.6% annual rate.
  • 18 of the 20 MSAs covered by S&P/Case-Shiller Home Price Indices and both monthly composites were down compared to December 2009.
  • San Diego and Washington DC as the only two cities where home prices are increasing on a year-over-year basis
  • The 10-City and 20-City Composites were down 0.9% and 1.0%, respectively, from their November levels. They are now only 3.9% and 2.3% above their April 2009 trough. Back in July 2010, they were +7.9% and +6.9% above the troughs, respectively.

The complete press release, as well as the historical data files, is attached to this email. Also attached are the details to today’s 10am teleconference on U.S. home prices featuring presentations by Professor Robert Shiller and Doctor David Blitzer. A Q&A session follows the call.

Declining home prices

Percentage change in home prices in December 2010 compared to year earlier in each market.

Atlanta …………… -8.0%

Boston …………… -0.8%

Charlotte ………… -4.4%

Chicago …………. -7.4%

Cleveland ..……… -4.0%

Dallas ……………. -3.6%

Denver …………… -2.4%

Detroit ……………. -9.1%

Las Vegas ……….. -4.7%

Los Angeles ‚Ķ‚Ķ… 0.2%

Miami …………….. -3.7%

Minneapolis ……… -5.3%

New York ………… -2.3%

Phoenix ‚Ķ‚Ķ‚Ķ‚Ķ… -8.3%

Portland …………… -7.8%

San Diego …………. 1.7%

San Francisco …….. -0.4%

Seattle ……………… -6.0%

Tampa ……………… -6.2%

Washington ………… 4.1%

Composite-20 city …. -2.4%

Source: Standard & Poor’s and Fiserv