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Home prices find new peaks in dozens of cities

12:15 PM, Oct 9, 2012   |    comments
A home for sale in the Denver area. (Photo: David Zalubowski, AP file)
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by Julie Schmit, USA TODAY
As U.S. home prices begin to edge up after largely falling for years, prices in a smattering of cities are already at all-time highs, new data show.

More than 100 metropolitan areas hit their peak home prices in July and a few in June, according to data through July from mortgage tracker Lender Processing Services. Those areas include Pittsburgh and Anchorage.

Another 50 areas are within 2% of their previous peaks, LPS' home price index shows. Examples: Austin; Denver and Boulder, Colo.; Indianapolis; and Portland, Maine.

Many cities whose prices are at or near peak levels never experienced the large swings in prices, up and down, that marked the national market's boom and bust in the past decade, says Mark Zandi, Moody's Analytics chief economist. So, the cities don't have as far to come back to hit highs.

Some of the markets have also risen in tandem with growing local economies, especially those built on strong energy and agricultural business.

All told, the 150 areas account for about 7% of the nation's residential housing stock.

Their price trends are a stark contrast with prices in most of the country.

Nationally, July home prices were up 1.2% from a year ago. But they were still 30% below their 2006 peaks, according to the closely watched Standard & Poor's Case-Shiller index of 20 leading cities.

But a look at a wider group of cities illuminates what Realtors have long maintained. National housing prices don't always reflect what's going on at a local level, where job growth, housing supply and other regional factors play big roles.

The cities that are hitting highs now are largely smaller than the nation's leading cities. Almost half of them are in Texas, Oklahoma, Colorado and North Dakota, the data show.

In Texas and Oklahoma, home prices didn't rise as fast or as much as the U.S. average leading up to the bursting of the housing bubble, Moody's Analytics' research reports show.

"We're been pretty steady in good and bad times," says Ron Croushore, owner of Prudential Preferred Realty in Pittsburgh. Average home prices there have been rising since 2010 after dipping only slightly, Croushore says.

Some of the cities have also been standout job creators.

Pittsburgh and Denver, for instance, posted faster job growth than the average for 49 similar size cities from the first quarter of 2010 to the same quarter this year, the U.S. Chamber of Commerce says.

While LPS shows Denver 2% off its previous home price peak, Case-Shiller's latest data show prices 5% off their 2006 peak.

Las Vegas prices are still 56% off their 2006 peak, LPS says. Other cities with July home prices more than 45% off former peaks include Cape Coral, Fla., and Riverside, Stockton and Bakersfield, Calif., LPS' data show.

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