February may feel like the darkest days of winter, especially this year, but it actually marks the unofficial start of the spring housing season. The weekend after the Super Bowl, home builders often kick off this busiest buying season with Presidents Day sales. Despite the frigid temperatures gripping much of the nation, the mercury on home prices has been rising—and that's where all eyes will be focused.
Two reports released this week showed big price gains in November from a year ago. The S&P/Case-Shiller index, which uses a three-month running average, showed prices up 13.7 percent from November 2012 in the nation's 20 largest housing markets.
Source: Stephanie Dhue CNBC
In a report from Black Knight Financial Services (formerly Lender Processing Services), prices are up a more modest 8.5 percent from a year ago. Black Knight uses a repeat sales analysis of prices as of their transaction dates every month. The differences have to do with how the two reports factor in distressed sale pricing.
Price gains have been stronger in formerly distressed markets such as Phoenix and much of California, but sales there are now slowing and inventories rising.
In the East and Midwest, where bad weather has plagued the market, sales are slow and prices are still hurt by slow foreclosure processing, especially in New York, New Jersey, Illinois and Maryland.
Nationally, though, the price gains look large—large enough to worry some analysts that housing could be approaching another bubble. The big gains in some markets are already pricing out certain buyers.
But the reality is that home prices are still below the peak of the boom in the spring of 2006, and the gains are already starting to slow. That's because of fewer foreclosures nationally and higher mortgage rates. Foreclosures were down 24 percent in December from a year earlier, according to CoreLogic, and mortgage rates are over a full percentage point higher than they were last spring.
As always, prices lag sales, so we can look to recent sales for an idea of 2014 pricing in different ranges. Sales on the low end of the market have slowed dramatically, down 11.5 percent in December from a year earlier for houses priced below $100,000, according to the National Association of Realtors.
On the flip side, sales of more expensive homes are seeing big gains, up nearly 18 percent for those between $750,000 and $1 million, and up 6.5 percent for those $1 million-plus.
As we head into this historically strongest season for housing, it is worth looking at what those higher-priced homes offer in markets across America. CNBC on Thursday kicked off its sneak peak with the latest edition of the Million Dollar Home Challenge. Appropriately, this one is set in markets NFL teams have reigned supreme.
On Thursday, seven reporters fanned out to seven markets, each displaying one home priced at about $1 million. They will not disclose their locations but will document the interiors, exteriors, marketed features and one unique bonus of each home.
Starting on CNBC's "Squawk Box," two homes are being featured. Anchors will guess the locations, and then real estate maven Dolly Lenz will disclose not just where they are but which home gives the better bang for the buck. The winner will move on to the next show. The champion will be crowned on CNBC's "Closing Bell."
Green Bay Packers
Too cold to sit through the Super Bowl at MetLife Stadium in New Jersey? Not a problem if you watch the game in this 6,700-square-foot mansion in Green Bay. This home has a heated four-car garage and a nook to shake the snow off your boots and put away the winter gear.
Million-dollar homes: Packers vs. Ravens
CNBC's Kayla Tausche provides a tour of Modern Manor, while Diana Olick reveals the living space of Enormous Estate. Superbroker Dolly Lenz makes her pick.
Not warm enough? Take a hot bath in the master suite's Kohler-custom spa. This suite also features an office and walk-in closet.
Head to the basement and host your Super Bowl party in the built-in movie theater and entertainment center.
Our second home is a three-story, 4,500-square-foot contemporary colonial in Baltimore. This house has a two-car garage. Got guests, and lots of them? There's street parking, a 6,000-square-foot living space, a spacious gourmet kitchen, four bedrooms and 4½ baths.
This property sits on just over half an acre. And what may seal the deal is this home's entertainment area, which has a theater, a wet bar and an exercise room nearby. Did we mention two fireplaces?
Price: $1 million.
"They're both really terrific houses," Lenz said. "Taxes are high in Green Bay, they're equivalent size lots, taxes in Green Bay almost $18,000 a year, where in Baltimore they're $12,000, so we're talking 50 percent higher. That's huge on a per month basis."
The winner: Baltimore
If the Baltimore home isn't big enough, this three-story house in Pittsburgh may be the ticket. At 5,000 square feet, it sits on two wooded acres and has a swimming pool, waterfall and covered porch with plenty of seating.
Million-dollar homes: Steelers vs. Colts
CNBC's Eamon Javers provides a tour of Window Wonder, while Morgan Brennan shows off the Brick Behemoth. Superbroker Dolly Lenz shares her pick for the best $1 million value.
This 36-year-old contemporary home also features a fireplace and a spacious bathroom suite in the master bedroom.
Our next house, in Indiana, is a traditional two-story with a three-car garage, two covered porches, a gourmet kitchen with a butler's pantry and a fireplace. This 5,900-square-foot home will also accommodate your Super Bowl party guests in its home theater with a fully stocked bar, and after the party is over, its six bedrooms make for a great sleepover.
"In Carmel [Indiana], the taxes on that house are $8,300 a year, which actually isn't bad," Lenz said. "The Pittsburgh house is $25,000 a year—that is the highest of all the houses we've selected for today, so I have to tell you that's really, really an issue for most people. You talk about $2,000 a month, just taxes."
The winner: Indiana
New Orleans Saints
Our next contender is in New Orleans, one of America's most popular cities. It's also a classic. Built in 1848, the 4,700-square-foot house on a 10th of an acre has a private courtyard, five bedrooms—one of them with a balcony—and 5½ baths.