Business Trends

Home Prices Continue to Improve

In Uncategorized on October 27, 2009 at 5:57 pm

Data through August 2009, released today by Standard & Poor’s for its S&P/Case-Shiller(1) Home Price Indices, the leading measure of U.S. home prices, show that the annual rate of decline of the 10-City and 20-City Composites improved compared to last month’s reading. This marks approximately seven months of improved readings in these statistics, beginning in early 2009.

The annual returns of the 10-City and 20-City Composite Home Price Indices, declined 10.6% and 11.3%, respectively, in August compared to the same month last year. Nineteen of the 20 metro areas and both Composites showed an improvement in the annual rates of decline with August’s readings compared to July. Cleveland was the only exception.

“Broadly speaking, the rate of annual decline in home price values continues to improve,” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. “The two Composites and 19 of the 20 metro areas showed an improvement in the annual rates of return, as seen through a moderation in their annual declines. Looking at the monthly data, 17 of the MSAs and both Composites saw price increases in August over July. While many of the markets remain down versus this time last year, the relative rate of decline has shown some real improvement. California, in particular, has seen some real positive prints in recent months. We see this general trend whether you look at the as-reported data or the seasonally adjusted figures. Once again, however, we do want to remind people of the upcoming expiration of the Federal First-Time Buyer’s Tax Credit in November and anticipated higher unemployment rates through year-end. Both may have a dampening effect on home prices.”

The index levels for the 10-City and 20-City Composite Indices show that as of August 2009, average home prices across the United States are at similar levels to where they were in the autumn of 2003. From the peak in the second quarter of 2006 through the trough in April 2009, the 10-City Composite is down 33.5% and the 20-City Composite is down 32.6%. With the relative improvement of the past few months, the peak-to-date figures through August 2009 are -30.2% and -29.3%, respectively.

In terms of annual declines, all metro areas and the two composites remain in negative territory, albeit most showing an improvement over the previous month’s figures. Dallas and Denver are continuing their trend from the past month, edging closer into positive territory with August figures of -1.2% and -1.9%, respectively. In addition, both New York and San Diego have emerged out of double-digit declines. New York was down 9.6% in August and San Diego was down 8.9%.

In the monthly data, only Charlotte, Cleveland and Las Vegas reported monthly declines in August over July. Minneapolis and San Francisco reported positive returns greater than +2.0%, and nine of the MSAs plus the two Composites reported monthly returns greater than +1.0%.

 

                       August 2009  August/July  July/June
    Metropolitan Area     Level      Change (%)  Change (%)  1-Year Change (%)
    —————–  ———–  ———–  ———-  —————–
    Atlanta              111.19         1.0%        2.3%           -10.6%
    Boston               155.95         0.9%        1.2%            -4.2%
    Charlotte            120.72        -0.4%        0.6%            -8.6%
    Chicago              130.55         1.7%        2.7%           -12.7%
    Cleveland            107.42        -0.5%        1.5%            -2.8%
    Dallas               121.44         0.2%        1.2%            -1.2%
    Denver               130.07         1.0%        1.5%            -1.9%
    Detroit               71.59         1.9%        1.1%           -22.6%
    Las Vegas            105.78        -0.3%       -1.1%           -29.9%
    Los Angeles          166.52         1.6%        1.8%           -12.0%
    Miami                148.91         1.1%        1.3%           -18.8%
    Minneapolis          122.66         3.2%        4.8%           -13.7%
    New York             174.89         0.5%        0.9%            -9.6%
    Phoenix              108.41         1.6%        1.8%           -25.1%
    Portland             150.46         0.3%        1.1%           -12.5%
    San Diego            153.34         1.6%        2.5%            -8.9%
    San Francisco        132.47         2.8%        3.3%           -12.5%
    Seattle              149.54         0.1%       -0.1%           -14.7%
    Tampa                143.43         0.4%        1.4%           -17.7%
    Washington           178.84         1.4%        1.9%            -7.9%
    Composite-10         157.93         1.3%        1.7%           -10.6%
    Composite-20         146.00         1.2%        1.6%           -11.3%
    Source: Standard & Poor’s and Fiserv
    Data through August 2009

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