Housing recovery is in good shape despite weak forth quarter
Scott Klocksin, Animal Spirits Staff Writer

Relatively soft housing numbers in the fourth quarter owe more to snow than to

The Case-Shiller 20-Cities Index was down in December for the second straight
month. But realtors and economists interviewed saw no reason to think that the
housing recovery is losing steam.

The Index took a 0.1% hit in the fourth quarter of 2013 relative to the third, and a
0.1% drop in December as compared to November.

That’s nothing to lose sleep over, said John Burdell, an economist at DePaul
University in Chicago.

“I don’t see any reason for there to be a big break yet in the upward movement,” Burdell
said. “And I would anticipate that it will continue into 2014.”

In one of the coldest winters in memory, even at the very start of the season the chill
could be felt in the market—and nowhere was that more true than in America’s coldest
major market: the Twin Cities.

“Our winters are always slow but this winter, who the hell wants to look at a house when
it’s fifteen below?,” said Scott Stabeck, an agent specializing in the high-end market with
Lakes Sotheby’s International Realty in Wayzata, MN, just west of Minneapolis.
Minneapolis, in fact, saw the worst December numbers on the 20-City Index with a 0.7%
drop from November. But Stabeck isn’t worried.


“This spring is really gonna heat up and probably take off,” he said. “And people are
worried that this year could be the end of these low mortgage rates so we’re going to see
a lot of people buy who’ve really been buyers for years but they’ve been waiting.”

Dallas, not exactly known for its brutal winters, boasted the strongest December gain on
the Index with a 0.2% rise from November. Barry Hoffer, who has been an agent with
the Dallas-area real estate powerhouse Ebby Halliday for over twenty years, said that
Dallas has a more stable economic base than other Sunbelt cities where the bubble of
2005-2007 took hold and over-burdened mortgages did the heavy lifting that allowed new
construction to proceed.

“It’s very simple supply-demand,” Hoffer said. “Companies are moving their
headquarters here, moving satellite offices here and that means the market has a lot
of buyers who can afford to buy and keep the market healthy.”

Hoffer said the healthy market in Dallas—which posted the largest yearly gain
throughout 2013 on the 20-City Index since the index was established—has to do
with Texas’ hospitality to new businesses and low corporate taxes.

Other warm-weather cities didn’t do as well as Dallas in December, but numbers in
Las Vegas (+0.4%) and Tampa (+0.3%) suggest that the upward trend throughout
2013 shows no sign of ebbing in the first quarter of 2014—even if brutal weather in
some parts of the country continues to skew the market slightly.

Scott Stabek said he can see the light at the end of the tunnel every time it warms up
in the Minneapolis area. “There have been a few days when the weather’s been warmer
and it has picked up,” Stabeck said. “Now that we’re getting to late February and early
March, we’re getting calls from people.”