S&P: December Home Prices Down -3.1% YOY, 12th Month of Less Decline (20-City Price Table)
The S&P Case Shiller December 2009 report of existing home sales showed year-over-year -3.1% price declines averaged across 20 major metropolitan areas (see table below). Notable declines for the year-over-year period were Las Vegas -20.6%, Tampa -11%, and Detroit -10.3%, and Phoenix -9.2%. But comparing YOY November to YOY December, all 20 metro areas showed improvement. Also Boston, Dallas, Denver, San Diego, San Francisco, and Washington are positive (see returns in table below). Home prices are now at similar levels to what they were in summer 2003. The 10 and 20 city home price composites saw improvements in their annual rates of return every month of 2009.
S&P acknowledged the obviously improved condition of the housing market versus the beginning of 2009, but said the rate of improvement since summer 2009 hasn’t been sustained. As a reminder S&P also said two months ago that a resumed decline in home prices like in the early-1980s seems unlikely because our monetary policy is more consistent than it was then. See our report from two months ago for more on that.
Case Shiller December 2009 Home Price Index
The index tracks existing single family homes, and is a credible pricing barometer for broad market analysis because it excludes condos and new construction. Condos can have more volatile pricing, and new construction pricing can be artificially set by builders, especially in times of distress when discounts an incentives can skew pricing. S&P refers to 10 and 20 “City” Composites, but these are actually metropolitan regional areas, not just cities. For example, where the city says San Francisco, this isn’t just San Francisco, but rather the entire 9 county Bay Area region.
FULL TEXT FROM PRESS RELEASE
Data through December 2009, 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 fell in the fourth quarter of 2009 but has improved in its annual rate of return, as compared to what was reported in the third quarter.
The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 2.5% decline in the fourth quarter of 2009 versus the fourth quarter of 2008. This is a significant improvement over the annual rates reported in the first, second and third quarters of the year, at -19.0%, -14.7% and -8.7%, respectively. In December, the 10-City and 20- City Composites recorded annual declines of 2.4% and 3.1%, respectively. These two indices, which are reported at a monthly frequency, have seen improvements in their annual rates of return every month since the beginning of the year.
Data through December 2009, 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 fell in the fourth quarter of 2009 but has improved in its annual rate of return, as compared to what was reported in the third quarter.
The chart above shows the index levels for the U.S. National Home Price Index, as well as its annual returns. As of the 4th quarter of 2009, average home prices across the United States are at similar levels to what they were in the summer of 2003. The 4th quarter values fell when compared to the 3rd quarter; however, the decline in the annual rate of return has significantly improved.
The 10-City and 20-City Composites continue to show improvement in their annual rates of return. In fact, all 20 metro areas and the two Composites saw improvement in their annual returns compared to November’s data. Only three cities – Detroit, Las Vegas and Tampa – still showed double digit annual rates of decline as of the end of 2009. Miami, Phoenix and Seattle all moved above such rates with December’s report.
Looking at the monthly statistics, 15 of the 20 metro areas showed a decline in December over November, with Chicago posting the sharpest decline, down 1.6%. Las Vegas finally posted its first positive print in more than three years, with +0.2%. The Southwest continues to be a bright spot, with San Diego posting its eighth consecutive monthly increase, and Los Angeles and Phoenix both posting their seventh. Three of the markets – Charlotte, Seattle and Tampa – posted new low index levels as measured by the past four years. In other words, any gains they might have seen in recent months have been erased and December is now considered their current trough value.
