Data through December 2011, released by S&P Indices for its S&P/Case-Shiller Home Price Indices shows that all three headline composites ended 2011 at new index lows. The national composite fell by 3.8 percent during the fourth quarter of 2011 and was down four percent versus the fourth quarter of 2010. Both the 10- and 20-City Composites fell by 1.1 percent in December over November, and posted annual returns of -3.9 percent and -4.0 percent versus December 2010, respectively. These are worse than the -3.8 percent respective annual rates both reported for November. With these latest data, all three composites are at their lowest levels since the housing crisis began in mid-2006.
In addition to both Composites, 18 of the 20 MSAs saw monthly declines in December over November. Miami and Phoenix were up 0.2 percent and 0.8 percent, respectively. At -12.8 percent, Atlanta continued to post the lowest annual return. Detroit was the only city to post a positive annual return, +0.5 percent in December versus the same month in 2010. In addition to the three composites, Atlanta, Las Vegas, Seattle and Tampa each saw average home prices hit new lows.
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 four percent decline in the fourth quarter of 2011 over the fourth quarter of 2010. In December, the 10- and 20-City Composites posted annual rates of decline of 3.9 percent and four percent, respectively.
“In terms of prices, the housing market ended 2011 on a very disappointing note,” said David M. Blitzer, chairman of the Index Committee at S&P Indices. “With this month’s report we saw all three composite hit new record lows. While we thought we saw some signs of stabilization in the middle of 2011, it appears that neither the economy nor consumer confidence was strong enough to move the market in a positive direction as the year ended."
“After a prior three years of accelerated decline, the past two years has been a story of a housing market that is bottoming out but has not yet stabilized," said Blitzer. "Up until today’s report, we had believed the crisis lows for the composites were behind us, with the 10-City Composite originally hitting a low in April 2009 and the 20-City Composite in March 2011. Now it looks like neither was the case, as both hit new record lows in December 2011. The National Composite fell by 3.8 percent in the fourth quarter alone, and is down 33.8 percent from its second
quarter 2006 peak. It also recorded a new record low."
“In general, most of the regions also posted weak data in December. Eighteen of the cities saw average home prices fall in December over November," said Blitzer. "Seventeen of the cities have seen monthly declines for at least three consecutive months. In addition to both monthly composites, 10 of the cities saw home prices fall by more than one percent during the month of December. The pick-up in the economy has simply not been strong enough to keep home prices stabilized. If anything it looks like we might have reentered a period of decline as we begin 2012.”