The June Case-Shiller numbers are out, and while prices in Los Angeles and San Diego are only up 0.3% and 0.2% from May, respectively, there are other parts of the nation where prices have cratered far worse, year-over-year. LA is down 3.4% from last June, while San Diego is down 5.3%. But Chicago is down 7.4% and Minneapolis, 10.8%. Phoenix and Portland are both down more than 9%.
So it's looking like SoCal is beginning to put the brakes on the slide.
The big question is whether the very modest SoCal uptick will persist. At this point, teensy price increases over a few months could indicate that we're finally seeing the housing market stabilize. And the S&P/Case-Shiller analysis indicates that SoCal may be mounting a recovery that's not going to be dragged down by other hard-hit markets:
“This month’s report showed mixed signals for recovery in home prices. No cities made new lows in June 2011, and the majority of cities are seeing improved annual rates. The National Index was up 3.6% from the 2011 first quarter, but down 5.9% compared to a year-ago,” says David M. Blitzer, Chairman of the Index Committee at S&P Indices. “Looking across the cities, eight bottomed in 2009 and have remained above their lows. These include all the California cities plus Dallas, Denver and Washington DC, all relatively strong markets. At the other extreme, those which set new lows in 2011 include the four Sunbelt cities – Las Vegas, Miami, Phoenix and Tampa – as well as the weakest of all, Detroit. These shifts suggest that we are back to regional housing markets, rather than a national housing market where everything rose and fell together.
That sounds good for California, but there's another statistic out there that Case-Shiller can't address: the high unemployment rate in the state. It's 12%, well above the national level of 9.1%. Until that problem is resolved, we may end up with a stable housing market that's still pretty depressing, given that it will be tough for it to return to pre-crisis price levels without jobs driving a revival of consumer demand.