Case-Shiller numbers underline weakness of local housing market

A few days back the Wall Street Journal published a sortable table of the S&P/Case-Shiller home price index for the top 20 U.S. metro markets. The most recent numbers (through February) show the Minneapolis metro area to be among the weaker markets in the survey: the sixth-worst performance against the January 2000 prices that form the baseline of the index; the ninth-worst year-over-year price decline (20.3 percent); and the seventh-worst month-to-month decline (3.1 percent).

Here’s the table sorted by performance against the January 2000 benchmark of 100. Even considering factors such as exurban sprawl and the weak regional economy, I’m at a loss to see why the local metro fares quite this poorly in a big picture sense relative to other U.S. population centers. Any of the real estate watchers in the house care to expound?

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Comments (2)

  1. Submitted by Ross Williams on 05/05/2009 - 10:39 am.

    Minneapolis has had below average numbers on the Case-Shiller index for the entire decade. But the current low numbers are a result of a precipitous drop since last September. Recent year-over-year prices in Minneapolis have been dropping much faster than average – declining 24 points compared to only 18 for the national indexes.

    The Minneapolis decline is about the same as Las Vegas and Miami over that period. Tampa, Phoenix and the Bay Area are the only cities declining faster since the September bust.

    It get worse when you look at the last three months, since November 2008. Of the cities in the 20 city index, only prices in Phoenix have fallen faster than Minneapolis.

    I suspect its the same reason, over-built suburban sprawl. The housing bubble simply covered up a stagnant real estate market where huge investments in transportation infrastructure supported semi-rural development at the expense of existing urban areas.

  2. Submitted by Richard Schulze on 05/23/2009 - 04:30 pm.

    Your last paragraph sums it up pretty well Ross.

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