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Latest S&P/Case-Shiller Report Finds Overall Home Sales Sluggish in 2011

NationalMortgageProfessional.com
Mar 29, 2011

Data released by Standard & Poor’s for its S&P/Case-Shiller Home Price Index shows further deceleration in the annual growth rates in 13 of the 20 metropolitan statistical areas (MSAs) and the 10- and 20-City Composites compared to the December 2010 report. The 10-City Composite was down two percent and the 20-City Composite fell 3.1 percent from their January 2010 levels. San Diego and Washington, D.C. were the only two markets to record positive year-over-year changes. However, San Diego was up a scant 0.1 percent, while Washington, D.C. posted a healthier +3.6 percent annual growth rate. The same 11 cities that had posted recent index level lows in December 2010, posted new lows in January. The chart below depicts the annual returns of the 10-City and the 20-City Composite Home Price Indices. In January 2011, the 10-City and 20-City Composites recorded annual returns of -2.0 percent and -3.1 percent, respectively. On a monthly basis, the 10-City Composite was down 0.9 percent and the 20-City Composite fell one percent in January versus December 2010. Only San Diego and Washington, D.C. posted positive annual growth rates in January 2011. These are the only two cities whose annual rates remained positive  throughout 2010. Every other MSA has either moved back into or has always been in negative territory during the recent housing crisis. On a monthly basis, Washington, D.C. was the only market where home prices rose in January, but up only 0.1 percent. The remaining 19 MSAs and both Composites fell during the month, with 12 of the markets and the 20-City Composite down by at least one percent versus December 2010. “Keeping with the trends set in late 2010, January brings us weakening home prices with no real hope in sight for the near future” said David M. Blitzer, chairman of the Index Committee at Standard & Poor's. “With this month’s data, we find the same 11 MSAs posting new recent index lows. The 10-City and 20-City Composites continue to decline month-over-month and have posted monthly declines for six consecutive months now. These data confirm what we have seen with recent housing starts and sales reports. The housing market recession is not yet over, and none of the statistics are indicating any form of sustained recovery. At most, we have seen all statistics bounce along their troughs; at worst, the feared double-dip recession may be materializing. A few months ago we defined a double-dip for home prices as seeing the 10- and 20-City Composites set new post-peak lows. The 10-City Composite is still 2.8 percent above and the 20-City is 1.1 percent  above their respective April 2009 lows, but both series have moved closer to a confirmed double-dip for six  consecutive months. At this point we are not too far off, and that is what many analysts are seeing with sales, starts and inventory data too."  “Looking across some of the markets, we see that with a January 2011 index level of 99.59, Atlanta has joined Cleveland, Detroit and Las Vegas as markets where average home prices are now below their January 2000 levels," said said Blitzer. "Washington, D.C. appears to be the only market that has weathered the recent storm. While it was up only 0.1 percent for the month of January, it’s annual rate was a relatively healthy +3.6 percent, it is still +10.7 percent above its March 2009 low, and ranks number one among the 20 markets as its average value is almost 85 percent above its January 2000 level.” The chart above shows the index levels for the 10-City and 20-City Composite Indices. As of January 2011, average home prices across the United States are back to the levels where they were in the summer of 2003. Measured from their peaks in June/July 2006 through January 2011, the peak-to-current decline for the 10-City Composite and 20-City Composite is -31.7 percent and -31.8 percent respectively. The improvements from their April 2009 trough are +2.8 percent and +1.1 percent, respectively. Continuing the trend set late last year, 11 MSAs posted new index level lows in January 2011, from their 2006/2007 peaks. These cities are Atlanta; Charlotte; Chicago; Detroit; Las Vegas; Miami, Fla.; New York; Phoenix; Portland, Ore.; Seattle and Tampa, Fla. These same 11 cities had posted lows with December’s report, as well. In January, the 10-City and 20-City Composites were down 0.9 percent and one percent, respectively, from their December 2010 levels. The monthly statistics show that 19 of the 20 MSAs and both the 10-City and 20-City Composite were down in January 2011 versus December 2010, the only exception being Washington, D.C. which posted a month-over-month increase of 0.1 percent. Seventeen of the 20 MSAs and both Composites have posted more than three consecutive months of negative monthly returns. In January 2011, 12 of the 20 MSAs and the 20-City Composite are down by more than one percent compared to their levels in the previous month.
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