S&P/CASE-SHILLER: Home Prices Weaken; Back to Early 2003 Levels

By David M. Kinchen
S&P/Case-Shiller Home Price Indices: Home Prices Weaken as the Third Quarter of 2011 Ends; Nationally Home Prices Back to Early 2003 Levels
 Data through September 2011, releasedTuesday, Nov. 29, 2011  by S&P Indices for its
S&P/Case-Shiller  Home Price Indices  show that nationally home prices did not register a significant change in the third quarter of 2011, with the U.S. National Home Price Index up by only 0.1% from its second quarter level.

The national index posted an annual decline of 3.9%, an improvement over the 5.8% decline posted in the second quarter. Nationally, home prices are back to their first quarter of 2003 levels.

“Home prices drifted lower in September and the third quarter,” said David M. Blitzer, Chairman of the
Index Committee at S&P Indices. “The National Index was down 3.9% versus the third quarter of 2010
and up only 0.1% from the previous quarter. Three cities posted new index lows in September 2011 –
Atlanta, Las Vegas and Phoenix. Seventeen of the 20 cities and both Composites were down for the
month. Over the last year home prices in most cities drifted lower.  The plunging collapse of prices seen
in 2007-2009 seems to be behind us.  Any chance for a sustained recovery will probably need a stronger
economy,” he added.

“Detroit and Washington DC posted positive annual rates of change and also saw an improvement in
these rates compared to August. Only New York, Portland and Washington DC posted positive monthly
returns versus August,” Blitzer said. “It is a bit disturbing that we saw three cities post new crisis lows.  For the prior three or four months, only Las Vegas was weakening each month. Now Atlanta and Phoenix have fallen to new lows too. On a monthly basis, Atlanta actually posted a record low rate of -5.9% in September over August. The markets are fairly thin, and the  relative lack of closed transactions might be
exacerbating the downside. The relative good news is that 14 cities saw improvements in their annual
rates of change, versus the six that weakened.”

As of September 2011, the annual rate of change in 14 of the 20 MSAs and both Composites, covered by
S&P/Case-Shiller Home Price Indices, improved versus August. Atlanta, Las Vegas, Los Angeles, San
Francisco, Seattle and Tampa recorded lower annual declines in September compared to August. Detroit
and Washington DC were the only two MSAs to post positive annual rates of +3.7% and +1.0%
respectively. Detroit has now recorded three consecutive months of positive annual rates.

The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 3.9% decline in the third quarter of 2011 over the third quarter of 2010. In September, the 10- and 20-City Composites posted annual rates of decline of
3.3% and 3.6%, respectively. Eighteen of the 20 MSAs and both monthly Composites had negative
annual rates in September 2011, the only exceptions being Detroit and Washington DC.

As of the third quarter, the National Index level has recovered by +3.9% from  its recent index low in the first quarter of 2011. However, it is 3.9% below its 2010 Q3 level.  Atlanta, Las Vegas and Phoenix posted record index lows with September’s data. While Phoenix home prices are almost back to their January 2000 levels, Atlanta and Las Vegas prices have fallen below these levels.

More than 24 years of history for these data series is available,  and can be accessed in full by going to
www.homeprice.standardandpoors.com. For home prices in selected cities, click here.


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