Wednesday, December 01, 2010

Q3 2010 U.S. home prices fell 1.5% year-over-year

According to S&P/Case-Shiller, U.S. house prices fell 1.5% in the third quarter of 2010 compared to a year earlier:
Data through September 2010, released today by Standard & Poor’s for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, show that the U.S. National Home Price Index declined 2.0% in the third quarter of 2010, after having risen 4.7% in the second quarter. Nationally, home prices are 1.5% below their year-earlier levels. In September, 18 of the 20 MSAs covered by S&P/Case-Shiller Home Price Indices and both monthly composites were down; and only the two composites and five MSAs showed year-over-year gains. While housing prices are still above their spring 2009 lows, the end of the tax incentives and still active foreclosures appear to be weighing down the market.

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 1.5% decline in the third quarter of 2010 over the third quarter of 2009. In September, the 10-City and 20-City Composites recorded annual returns of +1.6% and +0.6%, respectively. These two indices are reported at a monthly frequency and September was the fourth consecutive month where the annual growth rates moderated from their prior month’s pace, confirming a clear deceleration in home price returns.


  1. Also from the Case Shiller report:

    "The only two which weren’t down in September were Las Vegas, which managed to stay a touch above the low set in July, and Washington DC."

    For the record, the index in DC is now at 188.79, up +4.5% YOY and up +13.8% over the multi year low of 165 hit in March 2009.

    Fear not though, cuz NOZ says DC will hit 135 by the year 2013. Also, the oracle of all oracles NONPARTISAN says we will hit 100 by 2013.

    Caw! Caw! Caw!!!

  2. "nonpartisan said...

    And now it is time to Watch-and-Learn again - beginning August 2010, you will see a RAPID decline in home prices resume - there will be no immunozone. Bring it on.
    May 15, 2010 7:37 AM"


  3. "+13.8% over the multi year low of 165 hit in March 2009."

    b, b, but, But, BUT, people here assured me that it was just a "little blip"???

  4. it's like time-travel . . . . . the case shiller report basically said that we're now back where we were in 2003.

  5. From Tim Iacono:

    "Probably the most grating aspect of the recent history of home prices around the country (at least, to me) is that, due in large part to the rise in government bailouts and federal deficit spending, the greater Washington D.C. area has been the best housing market for some time now, holding on to its housing bubble gains better than any other region"

    Most "grating" aspect? I must say, it does my little heart good to know that the perpetually high prices in the DC area are causing angst among the commentators out there. I love it!!!!!

  6. The WaPo had a very interesting article in last Sunday's paper about DC income and housing costs.

    It was telling that even in DC, as with many other places, people were spending quite a bit more than the traditional 30% of income on housing.

    The graphic (and the information presented) was not nearly as useful or clear as it might be - for starters, there was no breakout of incomes above $75k - a ridiculously low ceiling for the DC MSA. Still, I really would like to see just how much of the DC market is over extended at current bubble prices. As they say, "you don't know who's swimming naked until the tide goes out"; well, as Partisan is very fond of reminding us, the tide has not gone out in DC. I do personally suspect that there are lots of folks VERY insanely heavily leveraged on a bet that DC prices will not drop.

    This is not to say it's a bad bet - indeed, it looks like it was a very good call. Still, it's another sign that under the surface things may not be all that sound and stable here in Immunington.

  7. "Montpelier Partisan is very fond of reminding us, the tide has not gone out in DC."

    Minor point of clarification - while I do like to remind people, it is primarily the retards out there like NOZ and NONPARTISAN. These guys had absurd views of where we end up (DC case shiller of 100 or less), and their rationale as to why we end up there was nothing more than platitudes (i.e. all bellcurves complete).

    Quite frankly, I agree with you in that it is a bet and its not a bad one, as you say. I believe that prices are still too high to match incomes, and that the only reason they are still up there is people are speculating on appreciation.

    Still, unlike at the top when prices everywhere made no sense, fundamentals now indicate we are close, and I do not believe the view that we hold on to more of our fair share is a bad bet (as apparently you do not either).

    Nice thing is, belief it will hold is rational. Belief it will not hold is rational. I can see both sides of it, and apparently you can too.

    What I cant see is why we go to case shiller 100 by 2013 on a rationale based on nothing more than "all bellcurves complete". Thus, I like to check in on a monthly basis, as a painful reminder of how stupid it is to believe in moronic platitudes and other things that have no basis in fundamentals. Sorry you and the rest of the reasonable people out there (if there are any) have to endure this...

  8. @Partisan - something about the "CAW CAW CAW" thing just really grates my nerves. I doubt much if you're a guy I would want to have a beer with or even be stuck in the same bar with. The back and forth with the other two is just not...informative. Even Lance shut up.

    I believe that prices are still too high to match incomes, and that the only reason they are still up there is people are speculating on appreciation.

    Still...fundamentals now indicate we are close...

    I think you're completely contradicting yourself there.

    My point about incomes and housing costs was that the fundamentals are bad. If things start to slip at all in DC, then the weak foundations might really give out. That's my point. If you're spending >50% of your income on housing, that's out of whack with long term fundamentals. It ONLY works for an appreciating market.

    DC benefits from a steady stream of young people willing to pay that premium for a while to live the hipster life in the urban core. That props up rents and props up purchase prices for buyers (allows them the safety of covering carrying costs if need be, basement apartments supplement mtg. pmts, etc.).

    I will be very interested to see if we get serious budget cuts from our new Congress and what impact that has.

  9. Montpelier, re: your last statement, the impact of fiscal responsibility in DC will be very transparent. The bell curve will complete.

    Only irresponsibility is keeping this bubble inflated.

  10. The only person here who believes Partisan owns a home is himself.

    But hey...anyone can say anything on the internet and think it's true.