Tuesday, April 27, 2010

Case-Shiller: Annual Returns for Housing Prices Are Positive for the First Time Since December 2006

The S&P/Case-Shiller Home Price Indices for February 2010 were released today. Highlights include:

1. The 10-City Composite Home Price Index (seasonally adjusted) has increased nine consecutive months for the first time since the spring of 2006, almost four years ago, and it reached its highest level since December 2008, 14 months ago (see top chart above).

2. Based on the percentage increase from the same month in the previous year, the annual rates of returns for both home price indexes improved in February, marking the 13th consecutive monthly improvement for the seasonally adjusted Composite-10 Index and the 11th monthly improvement for the Composite-20 Index. For the first time since December 2006, the annual rates of returns are
positive for the seasonally-adjusted indexes: 1.48% for the Composite-10 Index compared to last February and 0.70% for the Composite-20. For the unadjusted home price indexes, the annual returns are 1.4% and 0.60%.

3. The city with the biggest annual decline in the Case-Shiller index was Las Vegas, with a -14.6% decrease from last February, but it was the smallest year-over-year decline since November 2007.


At 4/27/2010 2:00 PM, Anonymous Anonymous said...

It pays to read the fine print.

After reviewing the data, the S&P/Case-Shiller Home Price Index Committee believes that, for the present, the unadjusted series is a more reliable indicator and, thus, reports should focus on the year-over-year changes where seasonal shifts are not a factor. Additionally, if monthly changes are considered, the unadjusted series should be used.

Unadjusted S&P/Case-Shiller home prices have declined 5 consecutive months.

At 4/27/2010 3:29 PM, Anonymous morganovich said...

even this adjusted series is showing an incredibly anemic recovery. the gains of the last 12 months were achieved in about 3 in 2003...

At 4/27/2010 5:02 PM, Blogger KO said...

The real test now is the level as the comps get harder. The home buyer credit started part way during the year last year and now is going away part way during this year.

If it was truly an incentive, in the coming months there should be a decline or slow down to match against a pop last year. And there's been a slight increase in 30 year rates.

CNBC say first time buyers were 44% of buyers in March. Investors were 19%.


At 4/27/2010 5:49 PM, Anonymous Anonymous said...

We believe that the recent reversal in housing prices is the result of a temporary constriction in the supply of foreclosed homes on the market. This temporary constriction ensued because servicers have completed fewer foreclosures due to court delays, servicing backlogs, and political pressure to keep borrowers in their homes. However, there is a rapidly growing shadow inventory of properties where borrowers are delinquent but foreclosure has not been completed. Overall, it is our opinion that recent positive housing reports should not be construed as a sign that the distress in the residential housing market is abating, but rather should be attributed to the temporarily limited supply of homes on the market.

Standard & Poors

At 4/27/2010 5:52 PM, Anonymous Anonymous said...

... this "pent-up supply" combined with foreclosures already in the pipeline and those yet to come because of negative equity and job losses means it will take three-to-five years "before we see more normal appreciation rates return to the market," the economist predicts.

Housing's Big "Shadow": Up to 10M More Homes Could Be for Sale

At 4/28/2010 1:17 PM, Anonymous grant said...

Whats a normal appreciation rate.Before 1950 there was hardly any appreciation in house prices so your view of normal is not normal at all but just a by product of more modern times.


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