Case-Shiller Data Confirms Double-Dip in Home Prices
The March S&P/Case Shiller Home Price Indices,rnreleased by Standard & Poor’s, paint an increasingly clearrnpicture of the “double dip” in U.S. home prices.</p
The indices, which are billed by S&P asrnthe leading measure of U.S. home prices, are constructed to track the pricernpath of typical single-family homes in a number of metropolitan statisticalrnareas (MSAs). The study uses matchedrnprice pairs of individual houses to construct a 20-City Composite Index and arn10-City Composite Index which are updated monthly. The indices have a base value of 100 which was set inrnJanuary 2000. Thus a current index valuernof 150 indicates there has been a 50% appreciation since that date for arntypical home in the subject market.</p
ExcerptsrnFrom The Release…</p
The U.S. National Home Price Index declined by 4.2%rnin the first quarter of 2011, after having fallen 3.6% in the fourth quarter ofrn2010. The National Index hit a new recession low with the first quarter’s datarnand posted an annual decline of 5.1% versus the first quarter of 2010.rnNationally, home prices are back to their mid-2002 levels.</p
Twelve of the 20 MSAs and the 20-City Composite alsornposted new index lows in March. With an index value of 138.16, the 20-CityrnComposite fell below its earlier reported April 2009 low of 139.26. Minneapolis posted a double-digit 10.0%rnannual decline, the first market to be back in this territory since March 2010rnwhen Las Vegas was down 12.0% on an annual basis.</p
Eleven cities and both Composites have posted at least eight consecutive months of negative month-over month returns. Of these, eight cities are down 1% or more.</p
“This month’s report is marked by the confirmationrnof a double-dip in home prices across much of the nation. The National Index, the 20-City Compositernand 12 MSAs all hit new lows with data reported through March 2011. The National Index fell 4.2%rnover the first quarter alone, and is down 5.1% compared to its year-ago level. Home prices continuernon their downward spiral with no relief in sight.” says David M. Blitzer, Chairman of the IndexrnCommittee at S&P Indices.</p
“The rebound in prices seen in 2009 and 2010 wasrnlargely due to the first-time home buyers tax credit. Excluding the results of that policy, there has beenrnno recovery or even stabilization in home prices during or after the recent recession. Further, whilernlast year saw signs of an economic recovery, the most recent data do not point to renewed gains.”</p
“Since December 2010, we have found an increasing number of markets postingrnnew lows. In March 2011, 12 cities – Atlanta, Charlotte, Chicago, Cleveland, Detroit, Las Vegas,rnMiami, Minneapolis, New York, Phoenix, Portland (OR) and Tampa – fell to their lowest levels asrnmeasured by the current housing cycle.” </p
The table below summarizes the results for Marchrn2011. The S&P/Case-Shiller Home Price Indices are revised for the 24 priorrnmonths, based on the receipt of additional source data.</p
In the midst of all these falling prices and recordrnlows, Washington DC was the only city where home prices increased on both arnmonthly (+1.1%) and annual (+4.3%) basis. Seattle was up a modest 0.1% for thernmonth, but still down 7.5% versus March 2010.</p
S&P/Case-Shiller reports data on both a seasonallyrnadjusted and non-adjusted basis but recommends using the latter as being a morernreliable indicator. We have used onlyrnthe non-adjusted data in compiling this summary.
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