Because of a split between states east of the Mississippi River and those west of the river, indicators for the U.S. home market seem to be all over the board. From June to July, cities in the East, including Chicago and Miami, experienced price drops, but cities in the West, such as Portland and Las Vegas, witnessed price increases.
Analysts seeking an explanation for the uneven market have found answers to their questions in the divide that has occurred in recent months. Although the number of new-home sales hit its highest mark since 2008 this past August, indicators predicting the strength of the market have not been readily apparent.
Economists claim that the divide in the housing market varies widely in different cities because it is so strongly linked to the job market. In the West, where the technology sector is strongest, home prices have rapidly increased, but cities in the East that have strong industrial sectors saw price drops.
“These conflicting trends may be confusing and even frustrating for some, but right now they shouldn’t be too much cause for concern,” said Svenga Gudell, chief economist for Zillow. “The market is continuing to heal and find its footing in a new environment, one where highly local factors, including jobs, matter more in local markets than national trends.”
According to the S&P/Case-Shiller index, San Diego, Dallas, Portland, Phoenix and Las Vegas experienced the highest growth from June to July while Chicago, Detroit, Minneapolis, New York and Miami saw sharp declines.