Case Shiller index shows home prices rising in American cities

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An index of home prices in the nation’s largest cities rose from June to July, though is still down from the same month a year earlier.

The Standard & Poor’s/Case-Shiller index of 20 American cities, a key measure that is closely watched by economists, was up 0.9% over June, but down 4.1% from July 2010. The month-over-month bump is most likely due to the seasonal boost the housing market gets over the summer and will most likely do little to cheer economists about the housing market’s future.

‘While we have now seen four consecutive months of generally increasing prices, we do know that we are still far from a sustained recovery,’ David Blitzer, chairman of the S&P index committee, said in a release announcing the new data Tuesday.

The rise in prices made for the fourth consecutive month of gains. Earlier this year the index pushed below its previous bottom hit in April 2009, confirming a much-feared double-dip, but has come back above that level since.

Some economists predict prices will drop again in fall and winter.

All of California cities in the index posted minor month-over-month gains. Los Angeles was up 0.2%, San Diego 0.1% and San Francisco 0.3%.

Home prices in the California cities are comparatively healthy despite the state’s high unemployment rate, because the markets tracked by the index are close to key job centers such as Hollywood and Silicon Valley and are also near the ocean -- where overbuilding was relatively constrained. The index does not track prices in California’s Central Valley or the Inland Empire, where housing is still weak.

The Case-Shiller index also includes data that are adjusted for seasonal variations, but the experts who publish these numbers have cautioned that the large number of foreclosures on the market have distorted the statistics. The adjusted data showed the index was flat from June to July.

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-- Alejandro Lazo

Twitter.com/AlejandroLazo