S&P: April Home Prices Down -18.1% YOY, 28 Months of Declines

The S&P Case Shiller April 2009 report of existing home sales showed year-over-year -18.1% price declines averaged across 20 major metropolitan areas (see table below). Notable declines were Las Vegas -32.2%, Phoenix -35.3%, and San Francisco -28.0%. From March to April, prices in all 20 cities in the composite were down. Both the 10 and 20 metro area Composites have been in year-over-year decline for 28 consecutive months, and home prices are at similar levels to what they were in mid-2003. From the home price peak in 2Q2006, the 20-City Composite is down 32.6%. A ray of hope: Since January declines in the 20-City composite have decreased by 0.9%.

Case Shiller April 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 April 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, although still negative, the annual decline of the 10-City and 20-City Composites improved.

The 10-City and 20-City Composites declined 18.0% and 18.1%, respectively, in April compared to the same month in 2008. These are improvements over their returns reported for March, down 18.7% for both indices. For the past three months, the 10-City and 20-City Composites have recorded an improvement in annual returns. Record annual declines were reported for both indices with their respective January data, -19.4% for the 10-City Composite and -19.0% for the 20-City Composite.

“The pace of decline in residential real estate slowed in April,” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. “In addition to the 10-City and 20-City Composites, 13 of the 20 metro areas also saw improvement in their annual return compared to that of March. Furthermore, every metro area, except for Charlotte, recorded an improvement in monthly returns over March. While one month’s data cannot determine if a turnaround has begun; it seems that some stabilization may be appearing in some of the regions. We are entering the seasonally strong period in the housing market, so it will take some time to determine if a recovery is really here.

“The stock market bottomed in March and measures of consumer confidence have turned upward. This report shows that these better spirits are also appearing in the housing market” Mr. Blitzer commented.

The chart above shows the index levels for the 10-City and 20-City Composite Indices. As of April 2009, average home prices across the United States are at similar levels to where they were in the middle of 2003. From the peak in the second quarter of 2006, the 10-City Composite is down 33.6% and the 20- City Composite is down 32.6%.

In terms of annual declines, the three worst performing MSAs continue to be the same three from the Sunbelt. Phoenix was down 35.3% in April, Las Vegas declined 32.2% and San Francisco fell 28.0%. Denver, Dallas and Boston continue to fare the best in terms of annual declines down 4.9%, 5.0% and 7.7%, respectively. Charlotte, Chicago, Cleveland, New York, Portland and Seattle posted record annual declines in April. For the month Dallas was the best performer returning +1.7%, while Las Vegas was the worst performer down 3.5%.

Looking at the data from relative peaks-through-April 2009, Dallas has suffered the least, down 9.6% from its peak in June 2007; while Phoenix is down 54.1% from its peak in June of 2006. Excluding Dallas, all of the 20 metro areas are in double digit declines from their peaks, with 10 of the MSAs posting declines of greater than 30% and two of those – Phoenix and Las Vegas – in excess of 50%.