The double dip in US home prices is here.
From S&P’s HousingViews blog:
Data through March 2011 show that the National Index hit a new recession low with the first quarter’s data (the prior low was the first quarter 0f 2009, and we define this as the “double-dip”). The S&P/Case-Shiller U.S. National Home Price Index declined by 4.2% in the first quarter of 2011, after having fallen 3.6% in the fourth quarter of 2010. Nationally, home prices are back to their mid-2002 levels.
This means that any run-up in home prices between 2002 and the 2006 peak has been erased.
On average home prices are selling at the same value they were nine years ago and are 34% below their 2006Q2 peak.
Click to enlarge.
This is not good for US banks, among others. As noted on ResearchRecap last week, S&P calculates that a double dip in home prices could cost US banks an additional $70-80 billion in loan losses.
The only bright spot in the latest Case-Shiller numbers is the strong performance of the Washington DC area market. HousingViews has a ranking of performance by cities that shows Washington as a clear short- and long-term winner.