S&P Case-Shiller Index Records Another Drop in Home Prices
By: Carrie Bay
Data released Tuesday morning by Standard & Poor’s show that home prices are continuing to trend downwards.
The 10-city and 20-city composites of the S&P/Case-Shiller home price index fell 0.9 percent and 1.0 percent, respectively, in January 2011 when compared to the previous month.
The 10-city composite is down 2.0 percent from its January 2010 level, while the 20-city reading dropped 3.1 percent on a year-over-year basis.
San Diego and Washington D.C. were the only two markets to record positive year-over-year changes. However, San Diego was up a scant 0.1 percent, while Washington D.C. posted a healthier 3.6 percent annual gain.
The same 11 cities that had posted recent index level lows in December 2010, posted new lows in January from their 2006/2007 peaks: Atlanta, Charlotte, Chicago, Detroit, Las Vegas, Miami, New York, Phoenix, Portland, Seattle, and Tampa.
“Keeping with the trends set in late 2010, January brings us weakening home prices with no real hope in sight for
the near future” said David M. Blitzer, chairman of the index committee at Standard & Poor’s.
“These data confirm what we have seen with recent housing starts and sales reports,” Blitzer continued. “The housing market recession is not yet over, and none of the statistics are indicating any form of sustained recovery. At most, we have seen all statistics bounce along their troughs; at worst, the feared double-dip recession may be materializing.”
Blitzer explained that S&P defines a double-dip for home prices as seeing the 10- and 20-city composites set new post-peak lows.
He noted that the 10-city composite is still 2.8 percent higher and the 20-city is 1.1 percent above their respective April 2009 lows, but he warns that both series have moved closer to a confirmed double-dip for six consecutive months.
“At this point we are not too far off, and that is what many analysts are seeing with sales, starts, and inventory data too,” Blitzer said.
Looking deeper at market-level results, S&P found that Atlanta has now joined Cleveland, Detroit, and Las Vegas as markets where average home prices are currently below their January 2000 levels.
The agency’s report states that Washington D.C. appears to be the only market that has weathered the recent storm.
It’s the only market to post a month-over-month gain in January, and its annual rate of return is the healthiest among all cities included in the study. Home prices in Washington D.C. are still 10.7 percent above their March 2009 low, and almost 85 percent above the city’s January 2000 index level.
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