Tuesday, February 28, 2012

S&P/Case-Shiller national HPI shows 4% fall in home prices

U.S. home prices fell 4.0% during 2011:
Data through December 2011, released today by S&P Indices for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, showed that all three headline composites ended 2011 at new index lows. The national composite fell by 3.8% during the fourth quarter of 2011 and was down 4.0% versus the fourth quarter of 2010. Both the 10- and 20-City Composites fell by 1.1% in December over November, and posted annual returns of -3.9% and -4.0% versus December 2010, respectively. These are worse than the -3.8% 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.
Note: Only the national composite index really matters when measuring the national housing market. Ignore the 10- and 20-city indexes.
In addition to both Composites, 18 of the 20 MSAs saw monthly declines in December over November. Miami and Phoenix were up 0.2% and 0.8%, respectively. At -12.8% Atlanta continued to post the lowest annual return. Detroit was the only city to post a positive annual return, +0.5% 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. ...
Translation: Washington, DC metro area home prices fell, too.

As I pointed out yesterday, Phoenix, Detroit, and Miami are dirt cheap, so the prices should rise. Las Vegas and Tampa are also dirt cheap, but apparently prices are still falling there.
“In terms of prices, the housing market ended 2011 on a very disappointing note,” says 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. 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% in the fourth quarter alone, and is down 33.8% from its 2nd 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. 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 1.0% 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.”
To paraphrase Annie: The bottom, the bottom, I love you, the bottom. You're always a year away.


  1. Can't speak for the rest of the country, but I have a pretty strong hunch we will continue to see increasing values in Martin County, FL.  It's been trending like that for a few months now.

  2. "To paraphrase Annie: The bottom, the bottom, I love you, the bottom. You're always a year away."

    Just a reminder, the bottom, as it applies to Washington DC was March 2009.  Despite the most recent drop, we are still nowhere near that March 09 level. 

  3. Very sorry I haven't touched base in a while, not sure what the deal is but they started blocking the comments section at work. At any rate, Partisan is now winning our friendly competition with 7 months won versus my 4. BUT, the pendulum appears to be swinging toward my favor, however the more active spring and summer sales seasons may turn that trend around. I'm afraid I have my spreadsheet at home, perhaps Partisan will post the latest results. Transaction volume remains extremely low, and revisions to previous months seem to consistently be downward. My observations of properties for sale (I'm a redfin junkie) seem to indicate that many are going for less than the cost of renting them.  

  4.  Ok thanks to share your information here

  5. Prices are 8.4% above that bottom, I'll leave it to English teachers as to whether that is "nowhere near." But with sales transactions at record lows and lots of housing inventory on the way (I can count 4 construction cranes from my apartment window), it's conceivable that housing will get more affordable, particularly in a city where poorer residents have substantial voting power.