Denver and Minneapolis Home Prices

S&P is out with the new Case-Schiller Home Price Index for June. In May, 7 of the 20 cities in the index showed an increase in average sales price from April. In June, 9 of the 20 cities showed a price increase. Some of this is a result of normal seasonal patterns, but I believe it provides further proof that the worst of the home price declines are behind us.

Two of the cities that show an increase for both May and June are hosts to the Democratic and Republican National Conventions. So I thought that this month I'd focus on Denver and Minneapolis.

Both cities have more severe climate swings than the California and Florida markets I looked at last month. In the past two years the seasonal effects on home prices there have been even more pronounced than usual. The following graph shows the historical price pattern and my expectation through August of 2009.

















The price swings upward in both cities is likely to last only for the summer, followed by a new, but more subdued price decline. Neither Denver nor Minneapolis have had prices run up as fast as the national averages, so they are not likely to fall much further.