Home Prices "Drifted Lower" in Latest S&P/Case-Shiller Survey

by devteam November 29th, 2011 | Share

The S&P/Case-Shiller Home PricernIndices for the third quarter of 2010 indicate that nationally home prices werernflat relative to the second quarter.  Thernnational index was up a mere 0.1 percent on a non-seasonally adjusted basis fromrnits second quarter level while narrowing the year-over-year decline to 3.9rnpercent.  Prices had dropped 5.8 percentrnfrom the second quarter of 2010 to the second quarter of 2011.</p

August to September figures improved forrn14 of the MSAs and both the 10- and 20-City Composites but both compositesrndeclined on an annual basis; the 10-City by 3.3 percent and the 20-City by 3.6rnpercent.   Detroit and Washington, DC posted the only positivernannual rates, 3.7 percent and 1.0 percent respectively.  September was the third straight month thatrnDetroit posted a positive annual change. </p


David M. Blitzer, chairman of the IndexrnCommittee at S&P Indices said, “Three cities posted new index lows in Septemberrn2011 – Atlanta, Las Vegas and Phoenix. rnSeventeen of the 20 cities and both Composites were down for thernmonth.  Over the last year home prices inrnmost cities drifted lower.  The plungingrncollapse of prices seen in 2007-2009 seems to be behind us.  Any chance for a sustained recovery willrnprobably need a stronger economy.</p

As of the third quarter, average homernprices in the U.S. have retreated to their early 2003 levels.  The National Index has recovered by 3.9rnpercent from its index low reached in the first quarter but is 3.9 percentrnbelow the level during the third quarter last year.</p

Atlanta, Las Vegas, and Phoenix had newrnindex lows in September.  Phoenix is nowrnback to its January 2000 level (the base year for the Case-Shiller Index) butrnthe other two cities have fallen even below that. </p

Blitzer said, “It is a bit disturbingrnthat we saw three cities post new crisis lows. rnFor the prior three or four months, only Las Vegas was weakening eachrnmonth.  Now Atlanta and Phoenix havernfallen to new lows too. On a monthly basis, Atlanta actually posted a recordrnlow rate of -5.9 percent in September over August.  The markets are fairly thin, and the relativernlack of closed transactions might be exacerbating the downside.  The relative good news is that 14 cities sawrnimprovements in their annual rates of change, versus the six that weakened.”</p

Three cities posted gains between Augustrnand September; Washington, DC (+1.2 percent), Portland, Oregon and New York (0.1rnpercent each).  The 10-City Compositernlost 0.4 percent and the 20-City was down 0.6 percent.</p

S&P/Case-Shiller recommends use ofrnthe data they supply on a non-seasonally adjusted basis however they also publishrnadjusted data.  On an SA basis the thirdrnquarter prices for the National Index were down 1.2 percent from the secondrnquarter compared to +0.1 on an unadjusted basis.  The SA 10-City and 20-City indices were -0.4rnpercent and -0.6 percent respectively, identical to the unadjusted figures. </p

The S&P/Case-Shiller Indices arernweighted averages of the metro area indices for the component MSAs.  The indices’ base value of 100 was set inrnJanuary 2000.  Thus an index value of 150rnindicates that prices have appreciated 50 percent since the January 2000 date.</p<prnrnrnrnrnrnrnrnrnrnrnrn

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About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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