house for sale Yesterday’s release of the Case-Shiller Home Price Index has economists—and probably the Obama administration—on edge. The reason: an apparent softening of demand in October, which translated into weak home price growth across the 20 markets that the index tracks. That followed stronger, more widespread price growth in the summer months. The news has stoked fears of a “double dip” in house prices and the resulting havoc it might wreak in the mortgage market.

Like the economy itself, though, what you make of U.S. home prices depends on where you look. The latest Case-Shiller data portray an eclectic collection of metropolitan housing markets, experiencing divergent trends in recent months. The 20 metro areas tracked by Case-Shiller seem to break down into five types:

Consistent recovery. The three big coastal California metro areas—San Francisco, Los Angeles, and San Diego, along with Phoenix and Detroit, posted price gains in October, following at least three consecutive months of price growth. Prices in San Francisco were up a considerable 12 percent from their trough in April 2009.

Tenuous recovery. Prices in Denver, Washington DC, and Minneapolis are up anywhere from 4 to 10 percent from their lowest points earlier this year, and each has posted gains for at least three months running.   But increases in October were quite modest, under one-third of 1 percent. Still, these three metro economies are performing relatively well in most respects, suggesting that the recent slowdown could be temporary.

Ceding ground. Six metro areas—Atlanta, Boston, Chicago, Cleveland, Dallas, and Miami—all showed signs of house price recovery in the late spring and summer, and prices are up 2 to 5 percent from their troughs.   Yet all experienced modest price declines in October, which for four of the six (Atlanta and Chicago excepted) followed on declines in September.

Waiting for recovery. Prices are fairly stable, but have yet to register any significant rebound from their lowest point in Charlotte, New York, Portland, and Seattle. Some of this can be explained by the overall economic performance of these metro areas, which has been middling at best.  

Still falling. Las Vegas and Tampa would probably welcome a little stability. Unfortunately, prices there continue to drop. Each market is seriously overbuilt, and sits amid a weak regional economy.

Of course, even the 20 metro indices aggregate the experiences of several submarkets within each metro area.  

That noted, the “ceding ground” and “waiting for recovery” metro areas are ones to watch carefully in the coming months. Lots of national policy levers—the home buyer tax credit, interest rates, Fannie/Freddie and FHA lending standards, further refinements to the Making Home Affordable program—will matter, but in all likelihood, they won’t overshadow the local economic dynamics that seem to be sending home prices in America’s biggest metro areas in many different directions.

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