S&P/Case-Shiller February Home Price Data

The February S&P/Case-Shiller Median Home Price data was released Tuesday, and as shown in the table at right, the Composite 10-City and Composite 20-City year-over-year declines were once again extremely negative.

Las Vegas, Miami and Phoenix all registered 20% year-over-year declines, while Los Angeles, San Diego, Tampa and San Francisco weren't far behind. While Miami has fallen 22% from its highs, it still has the highest median home price at $218,740. Chicago was down 8.5% from 2/07 to 2/08, while New York was down 6.5%. Charlotte was the only city that maintained year-over-year gains at 1.48%.

And the median home price in Detroit has now fallen below $100,000 for the first time since December 1999. The average person buying a house in this decade is now down on their investment in Detroit, which has the lowest median home price of all 20 cities analyzed.

click to enlarge

Below we highlight the monthly year-over-year percentage changes of the 20 S&P/Case-Shiller cities and the two composite indices. As shown, the fall from the cliff hasn't hit the ground yet.

Comments

[User 185619]

You say "As shown, the fall from the cliff hasn't hit the ground yet." Where is this shown?

[VP of Common Sense]

If it had hit the ground, it would be shown.

[Malkiel]

"You say "As shown, the fall from the cliff hasn't hit the ground yet." Where is this shown?"

The downtrends on the charts must show an upleg in order to assume a bottom.

I'm afraid what may be happening now is that ad hoc policies adopted by lenders, such as higher down payments in certain markets, may be strangling the whole market. Potential buyers will likely give up applying for mortgages and give up their home shopping this season if the first 2 or 3 lenders they talk to all ask for the impossible, like 20% down payments with high credit scores...

[tcornelison]

As a mortgage lender I can testify that higher down payment requirements are a reality and strict credit guidelines have eliminated some potentially good buyers. Restrictions imposed by the MI companies and Fannie/Freddie have seriously restricted access to high loan to value financing.

This is an over correction on their part but they are trying to survive. It will take a couple of years for things to settle down and for guidelines to moderate to an appropriate point somewhere between current standings and the nonsense which was going on over the last few years.

It will be a long time before we see significant availability of 100% financing again from anything other than government insured loan programs like VA & USDA.