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Case-Shiller Reports Home Values Are One-Third Off-Peak

Apr 26, 2011

Data through February 2011, released by Standard & Poor's (S&P) Indices for its S&P/Case-Shiller Home Price Indices, shows that prices for the 10- and 20-City Composites are lower than a year ago, but still slightly above their April 2009 bottom. The 10-City Composite fell 2.6 percent and the 20-City Composite was down 3.3 percent from February 2010 levels. Washington, D.C. was the only market to post a year-over-year gain with an annual growth rate of +2.7 percent. Ten of the 11 cities that made new lows in January 2011 saw new lows again in February 2011. Detroit avoided another new low, managing a plus-one percent increase in February over January, the only city with a positive monthly change. With an index level of 139.27, the 20-City Composite is virtually back to its April 2009 trough value (139.26); the 10-City Composite is 1.5 percent above its low. The chart above depicts the annual returns of the 10-City and the 20-City Composite Home Price Indices. In February 2011, the 10-City and 20-City Composites recorded annual returns of -2.6 percent and -3.3 percent, respectively. On a month-over-month basis, the 10- and 20-City Composites were both down 1.1 percent in February versus January. San Diego, which had posted 15 consecutive months of positive annual rates ended its run with a -1.8 percent annual rate of change in February 2011. Washington, D.C. has assumed that status, with 15 consecutive months of positive annual growth rates beginning in December 2009 through February 2011. Twelve of the 20 MSAs and both Composites fared worse in terms of annual growth rates in February compared to January. Atlanta, Cleveland, Dallas, Detroit, Phoenix, Portland (Ore.) and Washington, D.C. saw improvements in their annual rates of return in February versus January; New York was unchanged. “There is very little, if any, good news about housing. Prices continue to weaken, trends in sales and construction are disappointing.” says David M. Blitzer, chairman of the Index Committee at S&P Indices. “Ten of the 11 MSAs that recorded index lows in January fell further in February. The one exception, Detroit, is 30 percent below its 2000 price level. The 20-City Composite is within a hair’s breadth of a double dip. Fourteen MSAs and both Composites have continued to decline month-over-month for more than six consecutive months as of February. Atlanta, Cleveland and Las Vegas join Detroit as cities with home prices below their 2000 levels; and Phoenix is barely above its January 2000 level after a new index low. The one positive is Washington, D.C. with a positive annual growth rate, +2.7 percent, and home prices more than 80 percent over its January 2000 level. Other cities holding on to large gains from 11 years ago include Los Angeles (68.25 percent), New York (65.19 percent) and San Diego (55.05 percent)” “Recent data on existing-home sales, housing starts, foreclosure activity and employment confirm that we are still in a slow recovery. Existing home sales and housing starts rose in March, but remain close to recent lows. Foreclosure activity showed decreases in mortgage delinquencies in the fourth quarter of 2010, but are still close to historic highs. The nation and 34 states registered a decline in their unemployment rates for March.” The chart above shows the index levels for the 10-City and 20-City Composite Indices. As of February 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 February 2011, the peak-tocurrent decline for the 10-City Composite and 20-City Composite are -32.5 percent and -32.6 percent, respectively. For the 10-City Composite, the improvement from its April 2009 trough is a scant +1.5 percent and the 20-City Composite is virtually back to its April 2009 trough level. From their 2006-2007 peaks, 10 MSAs posted new index level lows for the third consecutive month in February 2011. These are Atlanta, Charlotte, Chicago, Las Vegas, Miami, New York, Phoenix, Portland (Ore.), Seattle and Tampa. Detroit, which had posted a recent index level low in January 2011, is the only city that showed a monthly improvement of plus-one percent in February 2011. In February, the 10-City and 20-City Composites were both down 1.1 percent from their January 2011 levels. Nineteen of the 20 MSAs and both the 10-City and 20-City Composite fell in February versus January. Of these, 14 MSAs and both Composites posted negative monthly returns for more than six consecutive months. With the February 2011 report, 11 of the 20 MSAs and both Composites are down by more than one percent compared to their January levels. The table below summarizes the results for February 2011. The S&P/Case-Shiller Home Price Indices are revised for the 24 prior months, based on the receipt of additional source data. 
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Apr 26, 2011
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