CLEVELAND—The S&P/Case-Shiller Home Price Indices for August were released yesterday by S&P Dow Jones Indices and posted their highest year-over-year increases since February 2006. However, the metropolitan area of Cleveland has lagged behind most of the other cities, posting a 3.7% year-over-year increase. Of the 20 cities in the study, only New York posted a lower rate.
“The 10-City and 20-City Composites posted a 12.8% annual growth rate,” says David M. Blitzer, chairman of the index committee at S&P Dow Jones Indices. “The monthly percentage changes for the 20-City composite show the peak rate of gain in home prices was last April. Since then home prices continued to rise, but at a slower pace each month.”
Along with Cleveland, Midwestern cities included in the study were Detroit, Chicago and Minneapolis. Both Detroit and Minneapolis posted double-digit year-to-year gains. But Detroit suffered more from the housing collapse than other cities, and even with a annual gain of 16.4%, prices there remained the lowest of all the cities. In fact, Detroit remains the only city below its January 2000 index level. Minneapolis' index level rose 10.2% and Chicago's 8.7%.
The slowness of Cleveland home price recovery could be related to an anemic rate of job growth. Cleveland economist George Zeller recently told GlobeSt.com that “the whole state of Ohio is performing poorly. The July 2013 gain of 5,300 jobs in Ohio was an improvement over recent months when Ohio lost employment. But, the speed at which Ohio is gaining jobs continues to be too slow. Ohio has extended a new streak of sub-par job growth to 13 consecutive months, or more than one full year.”
“And you have Cleveland performing worse than the state while the state performs worse than the rest of the nation,” he added. He attributes much of the metro area's struggle to cutbacks in government jobs. The state lost nearly 10,000 government jobs in the past year alone, he said, with local governments losing about 8,700. “There is a broad-based weakness, but the biggest weakness in Cleveland is government. We need to speed up the rate of growth, but we're deliberately slowing it down.”
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
