The WPJ

Case-Shiller Home Price Index Remained Relatively Flat in January

Residential News » Residential Real Estate Edition | By Michael Gerrity | March 30, 2010 9:39 AM ET



According to the latest data released today from Standard & Poor's S&P/Case-Shiller Home Price Index, the annual rates of decline of the 10-City and 20-City Composites improved in January compared to December 2009.

In fact, the 10-City Composite is unchanged versus where it was a year ago, and the 20-City Composite is down only 0.7% versus January 2009. Annual rates for the two Composites have not been this close to a positive print since January 2007, three years ago.


spcs-03302010-chart-1.jpg

The chart above depicts the annual returns of the 10-City and 20-City Composite Home Price Indices, with a flat (0.0%) reading and down 0.7%, respectively, in January 2010 compared to the same month last year. All 20 metro areas and both Composites showed an improvement in their annual rates with this month's readings compared to the December 2009 print.

"The report is mixed. While we continue to see improvements in the year-over-year data for all 20 cities, the rebound in housing prices seen last fall is fading. Fewer cities experienced month-to-month gains in January than in December 2009, on both a seasonally adjusted and unadjusted basis." says David M. Blitzer, Chairman of the Index Committee at Standard & Poor's. "Moreover, in four cities - Charlotte, NC, Las Vegas, Seattle and Tampa - prices reached new lows following the financial crisis. Tampa and Las Vegas experienced some of the largest gains and declines in this cycle, while Charlotte and Seattle saw much more modest price booms and relatively late peaks. On a brighter note, San Francisco and Minneapolis are 15.2% and 12.9% above their trough values."

"Other recent data on housing also paint a mixed picture. Housing starts continue at extremely low levels, recent reports of home sales suggest the market remains difficult, and concerns remain about further foreclosures and a large shadow inventory of unsold homes. We are in a seasonally weak part of the year, but given the S&P/Case-Shiller Home Price data reported today, we can't say we're out of the woods yet."


spcs-03302010-chart-2.jpg

The chart above shows the index levels for the 10-City and 20-City Composite Indices. As of January 2010, average home prices across the United States are at similar levels to where they were in the autumn of 2003. From the peak in June/July of 2006 through the trough in April 2009, the 10-City Composite is down 33.5% and the 20-City Composite is down 32.6%. The peak-to-date figures through January 2010 are -30.2% and -29.6%, respectively.

Los Angeles and San Diego showed slight improvements in actual index levels from the previous month to the current month. All other metros and the two composites showed a slight drop from their December 2009 levels. Of that, four markets - Charlotte, Las Vegas, Seattle and Tampa - posted new index lows as measured by the current housing cycle where, depending on the market, we saw peaks in 2006 and 2007. The peak-to-current declines for these MSAs are -13.8%, -55.8%, -24.6% and -42.0%, respectively.

On a relative basis, Washington DC, Los Angeles and New York have held up the most, with each of those markets still 70% above their January 2000 levels. Las Vegas, which once stood 135% above its January 2000 level, is now showing price increases about 4% above that same level. Detroit remains that one market whose average value is below 2000, approximately 28% below that value.

 


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