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New Case-Shiller Report Confirms Nationwide Double-Dip in Home Prices

May 31, 2011

The latest Standard & Poor’s/Case-Shiller Home Price Index, a measure of U.S. home prices, shows that the U.S. National Home Price Index declined by 4.2 percent in the first quarter of 2011, after having fallen 3.6 percent in the fourth quarter of 2010. The National Index hit a new recession low with the first quarter’s data and posted an annual decline of 5.1 percent versus the first quarter of 2010. Nationally, home prices are back to their mid-2002 levels. As of March 2011, 19 of the 20 Metropolitan Statistical Areas (MSAs) covered by S&P/Case Shiller Home Price Indices and both monthly composites were down compared to March of 2010. Twelve of the 20 MSAs and the 20-City Composite also posted new index lows in March. With an index value of 138.16, the 20-City Composite fell below its earlier reported April 2009 low of 139.26. Minneapolis, Minn. posted a double-digit 10 percent annual  decline, the first market to be back in this territory since March 2010 when Las Vegas was down 12 percent on an annual basis. In the midst of all these falling prices and record lows, Washington, D.C. was the only city where home prices increased on both a monthly (+1.1 percent) and annual (+4.3 percent) basis. Seattle was up a modest 0.1 percent for the month, but still down 7.5 percent versus March 2010. The chart above depicts the annual returns of the U.S. National, the 10-City Composite and the 20-City Composite Home Price Indices. The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 5.1 percent decline in the first quarter of 2011 over the first quarter of 2010. In March, the 10- and 20-City Composites posted annual rates of decline of 2.9 percent and 3.6 percent, respectively. Thirteen of the 20 MSAs and both monthly Composites saw their annual growth rates fall deeper into negative territory in March. While they did not worsen, Chicago, Phoenix and Seattle saw no improvement in their respective annual rates. “This month’s report is marked by the confirmation of a double-dip in home prices across much of the nation," said David M. Blitzer, chairman of the Index Committee at S&P Indices. "The National Index, the 20-City Composite and 12 MSAs all hit new lows with data reported through March 2011. The National Index fell 4.2 percent over the first quarter alone, and is down 5.1 percent compared to its year-ago level. Home prices continue on their downward spiral with no relief in sight.” S&P/Case-Shiller U.S. National Home Price Index The chart above shows the index levels for the U.S. National Home Price Index, as well as its annual returns. As of the first quarter of 2011, average home prices across the United States are back at their mid-2002 levels. The National Index level hit a new low in the first quarter of 2011; it fell by 4.2 percent in the first quarter of 2011 and is 5.1 percent below its 2010 Q1 level. Eleven cities and both Composites have posted at least eight consecutive months of negative month-over-month returns. Of these, eight cities are down one percent or more. The only cities to post positive improvements in March versus their February levels are Seattle and Washington, D.C. with monthly returns of +0.1 percent and +1.1 percent respectively. The table below summarizes the results for March 2011. The S&P/Case-Shiller Home Price Indices are revised for the 24 prior months, based on the receipt of additional source data.     “Since December 2010, we have found an increasing number of markets posting new lows. In March 2011, 12 cities—Atlanta, Charlotte, Chicago, Cleveland, Detroit, Las Vegas, Miami, Minneapolis, New York, Phoenix, Portland (Oregon) and Tampa—fell to their lowest levels as measured by the current housing cycle," said Blitzer. "Washington, D.C. was the only MSA displaying positive trends with an annual growth rate of +4.3 percent and a 1.1 percent increase from its February level. The rebound in prices seen in 2009 and 2010 was largely due to the first-time homebuyer tax credit. Excluding the results of that policy, there has been no recovery or even stabilization in home prices during or after the recent recession. Further, while last year saw signs of an economic recovery, the most recent data do not point to renewed gains."
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