S&P Case Shiller: Home Prices Show Some Improvement Annually

by devteam October 26th, 2011 | Share

The take-away message from the August S&P/Case-ShillerrnHome Price Index (HPI) numbers published today appears to be, it’s not as badrnas last year.  While year-over yearrnnumbers are improving, most 10-City and 20-City Composite Indices increased 0.2rnpercent from July to August and 10 of the 20 cities saw price increases duringrnthe month.  Sixteen of the 20 cities andrnboth composite indices had better year-over-year improvements than they hadrnshown in July.</p

David M. Blitzer, Chairman of the IndexrnCommittee at S&P Indices said, “In the August data, the good news isrncontinued improvement in the annual rates of change in home prices.  In spring and summer’s seasonally strong periodrnfor housing demand, we cautioned that monthly increases in prices had to bernpaired with improvement in annual rates before anyone could declare that thernmarket might be stabilizing.  With 16 ofrn20 cities and both Composites seeing their annual rates of change improve inrnAugust, we see a modest glimmer of hope with these data.”</p

The 10-City index was up 0.9 percentrnover July to 156.36 and the 20-City was up 0.8 percent month-over-month to 142.84.rn The 10-City was down 3.8 percent fromrnthe August 2010 figure of 162.02 and the 20-city fell -3.5 percentrnyear-over-year compared the August 2010 level of 148.9.  The annual change figures in August werernimproved over July when the two composites showed year-over-year losses of 3.7rnand 4.1 percent respectively.   </p

ChartManager.loadChart(‘casechart’, ‘CaseShillerChart’,{url:’/data/marketdata/MarketDataGoogle/home-price-index-case-shiller/Volume/Month/Descending/data.ashx?NumRecords=0&returnAll=true’});


The four cities that did not improvernfrom July to August were Los Angeles, Miami, Atlanta, and Las Vegas.  The latter two also fell further intornnegative territory when August 2011 is compared to August 2010.   LasrnVegas now has an index of 95.18, second only to Detroit as the lowest MSA inrneither index and setting its own historic low. rnThe current HPI for Atlanta is 102.04. rnMinneapolis had the lowest year-over-year return at -8.5 percent but hasrnposted total increases of 3.2 percent in July and August.  Only Detroit and Washington, DC postedrnpositive annual returns; 2.7 and 0.3 percent respectively.</p

Blitzer said “The Midwest is one regionrnthat really stands out in terms of recent relative strength.  Chicago, Detroit and Minneapolis have allrnposted very sharp monthly increases going back to May.  These markets were some of the weakest duringrnthe crisis, particularly Detroit.  But asrnof August 2011, Detroit is the healthiest when viewed on an annual basis.  It is up 2.7 percent versus August 2010.  Prices there are still back to their 1994rnlevels, but the recent pickup in the US auto industry may finally be helping.”</p

S&P advises using its non-seasonallyrnadjusted figures but does publish a seasonally adjusted data set.  This month the 10-City index was down 0.2rnpercent compared to July and the 20-City was unchanged.</p

As of August 2011, average home pricesrnacross the country are back to the levels of mid-2003.  Measured from the peak of home prices inrnJuly/July 2006 to the present numbers the 10-City Composite have declined 30.9rnpercent and the 20-City 30.8 percent. rnPrices for the 10-City index hit a housing crisis low in April 2009 andrnthe 20-city reached a more recent low in March of this year.  Since their respective troughs the indicesrnhave improved 3.9 and 3.8 percent respectively. </p

The S&P/Case-Shiller HPI track thernprice path of typical single-family homes located in each of 20 metropolitanrnareas.   The indices have a base value ofrn100 in January 2000; thus a current index value of 150 translates to a 50rnpercent appreciation rate since the index was set for a typical home within thernsubject market.

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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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