Data released by Standard & Poor's for its S&P/Case-Shiller Home Price Indices (HPI) through July 2011 shows a fourth consecutive month of increases for the 10- and 20-City Composites, with both up 0.9 percent in July over June. Seventeen of the 20 Metropolitan Statistical Areas (MSAs) and both Composites posted positive monthly increases; Las Vegas and Phoenix were down over the month and Denver was unchanged. On an annual basis, Detroit and Washington, D.C. were the two MSA that posted positive rates of change, up 1.2 percent and 0.3 percent, respectively. The remaining 18 MSAs and the 10- and 20- City Composites were down in July 2011 versus the same month last year. After three consecutive double-digit annual declines, Minneapolis improved marginally to a decline of 9.1 percent, which is still the worst of the 20 cities.
The chart above shows the annual returns of the 10-City and the 20-City Composite Home Price Indices, which found that in July of 2011, the 10- and 20-City Composites recorded annual returns of -3.7 percent and -4.1 percent, respectively. Both Composites and 14 MSAs—Boston; Charlotte; Chicago; Cleveland; Dallas; Denver; Detroit; Las Vegas; Miami; Minneapolis; Phoenix; Portland; Tampa and Washington, D.C.—saw their annual rates improve in July compared to June.
“With July’s data, we are seeing not only anticipated monthly increases, but some fairly broad improvement in the annual rates of change in home prices,” said David M. Blitzer, chairman of the Index Committee at S&P Indices. “This is still a seasonal period of stronger demand for houses, so monthly price increases are expected and were seen in 17 of the 20 cities. The exceptions were Las Vegas and Phoenix where prices fell, while Denver was flat. The better news is that 14 of 20 cities and both Composites saw their annual rates of change improve in July."
The chart below indicates the index levels for the 10-City and 20-City Composite Indices, and as of July 2011, average home prices across the United States are back to the levels seen in the summer of 2003. Measured from their June/July 2006 peaks through July 2011, the peak-to-current declines for the 10-City Composite and 20-City Composite are -31 percent and -30.9 percent, respectively.
The peak-to-trough declines are -33.5 percent and -33.4 percent, respectively. The 10-City Composite hit its crisis low in April 2009, whereas the 20-City reached a more recent low in March 2011. As of July 2011, 17 of the 20 MSAs and both Composites posted positive monthly changes. Denver was flat. Las Vegas and Phoenix were marginally down over the month, with Las Vegas down by 0.2 percent and Phoenix down 0.1 percent. Las Vegas was the only city that posted a new index level low in July 2011. It is now 59.3 percent below its August 2006 peak.
“While we have now seen four consecutive months of generally increasing prices, we do know that we are still far from a sustained recovery. Eighteen of the 20 cities and both Composites are showing that home prices are still below where they were a year ago," said Blityzer. "The 10-City Composite is down 3.7 percent and the 20-City is down 4.1 percent compared to July 2010. Continued increases in home prices through the end of the year and better annual results must materialize before we can confirm a housing market recovery."
