Home Prices See Record Declines in July

The S&P/Case-Shiller Home Price Indexes' 10-City Composite and 20-City Composite reached new record annual declines of 17.5% and 16.3%, respectively, through the end of July, the most recent period tracked by S&P.

The 10-City Composite Index declined at a record level for the 10^th consecutive month. Taken together, these declines far surpass the record decline of 6.3% in a similar market trough between 1990-1992.

The news is not all bad, however. Overall declines have actually slowed in home prices in the most recent three-month period.

Cumulative home prices fell 2.2% for the three months ended July, whereas for the previous two consecutive three-month periods, the cumulative home price fall was more than triple that level, between 6-6.5%.

While the slowdown in home price declines is notable across metro areas, it does not necessarily mean a bottom has been reached in the market, and some metro markets continue to post outsized declines, S&P indicated.

All 20 major metro markets are still in negative territory year-over-year, and Las Vegas (-29.9%) and Phoenix (-29.3) had annual declines nearing 30%. The Sun Belt as a whole continued to be in the dark, with its seven major metro markets all posting declines of at least 20%. Don't make a bet on Vegas' home market, either: It continues to be the big loser at the table in terms of home price declines, followed by Phoenix and Miami (-28.2%).

Other major metro markets seem on the verge of a rebound, but S&P remains cautious on outlook.

Atlanta, Dallas, Minneapolis and Tampa all showed improvements in home pricing with the new monthly and annual data, but S&P indicated the markets remained too near recent lows to be demonstrating clear evidence of a turning tide. Atlanta, Boston, Dallas, Denver and Minneapolis all had positive returns for the past three months through the end of July. The smallest dips for the annual period through July were Charlotte (-1.8); Dallas (-2.5%); and Denver (-4.7%) 

U.S. Housing Prices Through July 2008
City	1-Year Change	July/June Change
Las Vegas	-29.9%	-2.8%
Phoenix	-29.3%	-2.7%
Miami	-28.2%	-1.6%
Los Angeles	-26.2%	-1.6%
San Diego	-25.0%	-1.8%
San Francisco	-24.8%	-1.8%
Tampa	-19.4%	0.0%
10-City Composite	-17.5%	-1.1%
Detroit	-16.7%	0.6%
20-City Composite	-16.3%	-0.9%
Washington	-15.8%	-1.1%
Minneapolis	-13.1%	1.3%
Chicago	-10.0%	-0.4%
Atlanta	-8.2%	0.4%
Seattle	-8.2%	-1.0%
Cleveland	-7.8%	-0.3%
New York	-7.4%	-0.8%
Portland	-6.6%	-0.5%
Boston	-5.4%	0.2%
Denver	-4.7%	0.8%
Dallas	-2.5%	0.6%
Charlotte	-1.8%	-0.2%

In the same 2007 annual period, the S&P/Case-Shiller Home Price Indexes fell 4.5% and 3.9%, respectively. The only five metropolitan areas last July to show positive one-year returns were Atlanta, Charlotte, Dallas, Portland and Seattle (see story here).

Comments

[moorer1:]

"The news is not all bad, however. Overall declines have actually slowed in home prices in the most recent three-month period."

It's not apparent to me that this is terribly relevant, as the home values are substantially seasonal, and the most recent three-month period just reflects this seasonal strength. The record year over year decline tells the real story. Those declines have to get smaller before any "not bad news" can be declared...

2008 Oct 01 04:30 PM

[Reinko:]

Without any insult to the intentions of the writer of the article:

House prices should never be compared month to month or quarter to quarter. Housing has strong components in both prices and volumes sold.

For example:

Students mostly move in the Summer, farmers mostly in the Winter.

When you look at detailed graphs you see some sine curve combined with a trend curve; this goes both for prices and volumes sold.

So you must compare monthly figures with those of a year ago.

In case you want to see what is happening on a month to month basis you act as follows:

Compare August year on year figures with July year on year figures.

In that case the seasonaly component if filtered out...

Therefore moorer11 is completely right!

2008 Oct 01 05:27 PM

[Griz:]

Ok, so I'll call the bottom: We're about halfway there.

2008 Oct 02 09:54 AM

[moorer1:]

"Ok, so I'll call the bottom: We're about halfway there. "

It's a little scary...but I agree.

2008 Oct 02 11:46 AM

[WAKEUP:]

Bottom: Not before the end of 2011. This thing is so BIG that folks are letting hopes get in the way of insight. Not before the end of 2011. And I still think that by the time the bottom is in, a lot of homes will have lost upwards of 50% of their formerly inflated prices.

2008 Oct 02 03:40 PM

[User 274060:]

HI

2008 Oct 03 06:23 AM