Case-Shiller Report Has Some Good News On Housing Market; Not Out of The Woods Yet Though


Dennis Norman

Dennis Norman

This morning the S&P/Case-Shiller Index report for February was released showing that, for the first time since December, 2006, the annual rates of change for their two composite home-price indices were positive. The 10-City Composite is up 1.4 percent from a year before and the 20-City Composite is up 0.6 percent from the same time last year. Unfortunately, 11 of the 20 cities included in the 20-City Composite had declines from the prior year, meaning that this positive bit of news is not “market-wide” but is the result of some metros with stronger markets.


On a positive note, 18 of the 20 metro areas in the 20-City Composite showed an improvement in their annual rates with February’s readings compared to the January 2010 figures, with Dallas and Portland being the only exceptions.

We are not “out of the woods” yet – the fat lady hasn’t sang –

“Beginning last November, each report showed gains as fewer cities reported year-over-year declines than in the previous month; those gains ended with this report. Further, in six cities prices were at their lowest levels since the prices peaked three-to-four years ago. These data point to a risk that home prices could decline further before experiencing any sustained gains. While the year-over-year data continued to improve for 18 of the 20 MSA’s and the two Composites, this simply confirms that the pace of decline is less severe than a year ago. It is too early to say that the housing market is recovering” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. “Nineteen of the 20 MSAs and both Composites declined in February over January. Fourteen of the MSAs and both Composites have now fallen for at least four consecutive months. In addition, prices reached recent new lows for six cities in February – Charlotte, Las Vegas, New York, Portland, Seattle and Tampa – sending a more cautionary message compared to the annual figures. While 14 MSAs and the two composites show improvement over their trough values reached in the spring 2009, we are not completely out of the woods“, said Blitzer.

Foreclosures still overshadow the good news –

“Existing and new home sales, inventories and housing starts all show tremendous improvement in their March statistics. The homebuyer tax credit, available until the end of April, is the likely cause for these encouraging numbers and this may also flow through to some of our home price data in the next few months. Amidst all the news, however, we should also pay heed to foreclosure activity, which have reached their highest level in at least the last five years. As these homes are put up for sale, we may see some further dampening in home prices“, said Blitzer.

Other highlights from the report –

  • As of February 2010, average home prices across the U.S. are at similar levels to where they were in late summer/early autumn of 2003
  • From their peak in June/July 2006 through the trough in April 2009, the 10-City Composite is down 33.5 percent and the 20-City Composite is down 32.6 percent.
    • From peak through February 2010 prices are down 30.7 percent on the 10-city index and 30.3 percent on the 20-city index.
  • San Diego was the only market that continued to show improvement in home prices between January and February. All other metros and the two composites showed declines from their January levels.
    • 12 of the MSAs home prices fell by at lest 1.0 percent during the month.
    • 6 of the MSAs, Charlotte, Las Vegas, New York, Portland, Seattle and Tampa, posted new index lows.
  • Charlotte and Cleveland have shown seven consecutive months of negative monthly returns.
    • Atlanta, Boston, Denver, New York and Tampa are not far behind, with six consecutive negative reports.



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