S&P’s newest Case-Shiller report revels a slow climb towards balance and a strong end to 2014.

It was another month of stellar performance for home prices in the Texas market, according to the newest Case-Shiller Home Price Indices from Standard & Poor’s. Gains were particularly pronounced in Dallas, where home prices rose a startling 7.6 percent from October 2013 to October 2014, and 0.1 percent month-over-month.

While the S&P doesn’t monitor Houston’s progress, surprisingly, Dallas is a good indicator for how the city is doing, as the areas have long run along a similar market trajectory. The gains experienced in September, which were among the strongest in the nation, represent not only a healthy market, but also one far exceeding the national average, which took a substantial and expected dip heading into fall. Texas remains a relatively affordable state, so price gains are welcome, but if these strong increases continue well into the new year, things could turn sour for the Lone Star State.

A National Balance

Once again, local trends were antithetical to what’s happening on the national scene:

• The 10- and 20-City Composites are up 4.4 and 4.7 percent year-over-year, respectively; that’s down from September’s yearly gains of 4.8 and 4.9 percent, and represent the smallest yearly increase in two years.
• Furthermore, the National Case-Shiller Index was down 0.2 percent from September to October, which marks two consectutive months of decreases for the index.
• Ten of the cities tracked by S&P stumbled with lower monthly figures, while eight boasted increases.

Blitzer Predicts Strong Winter

Towards the tail end of summer, heading into fall, housing prices were failing to keep pace with 2013, stumbling and, in many cases, falling, but David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices, put things into perspective, suggesting the market could end the year with something of a bang.

“After a long period when home prices rose, but at a slower pace with each passing month, we are seeing hints that prices could end 2014 on a strong not and accelerate into 2015,” he said.

Blitzer points out that only two months earlier, all 20 cities tracked by S&P were “experiencing weakening annual price increases.” However, in September only 18 cites saw weakness and in October that number was cut even further to 12.

“Seasonally adjusted, all 20 cites had higher prices than a month ago,” Blitzer said.