Tuesday, February 24, 2009
The December report(.pdf) for the S&P Case-Shiller Home Price Indices shows both the 10-city and 20-city index making new record annual declines of 19.2 percent and 18.5 percent, respectively. Price indices for all 20 cities are shown below.
The top to bottom position on the right (corresponding to the order of the legend in the upper left to aid in viewing the data) has been remarkably consistent over about the last six months. Just one slight change was required for the December data as Atlanta sunk below Dallas, these two areas managing to hang on to gains of just 14 percent and 16 percent, respectively, so far in the decade.
Ironically, New York and Washington, the two areas that many would consider to be the source of the lion's share of today's housing problems, have fared the best.
As shown below, Phoenix maintained its lead over both Las Vegas and San Francisco for the most extreme annual price plunge, all three areas continuing to sport declines of more than 30 percent as indicated in red.
It's not clear whether any more areas will join that group - Miami and Los Angeles are closest and Miami appears to be gaining momentum with a 2.7 percent drop in prices last month.
Those five percent monthly declines in Las Vegas and Phoenix are quite remarkable - you only need a house price of $200,000 to turn that into a $10,000 a month hit to home values. I remember in California a few years back when homeowners used to boast that their home's value rose another $10,000 over the last month.
Home values are now falling as fast as they rose, areas like Los Angeles and Miami almost perfectly symmetrical in their rise and fall as shown in the first chart above.
David M. Blitzer, Chairman of the Index Committee at Standard & Poor's, noted:
The broad downturn in the residential real estate market continues. There are very few, if any, pockets of turnaround that one can see in the data. Most of the nation appears to remain on a downward path, with all of the 20 metro areas reporting annual declines, and eight of those MSA’s now with negative rates exceeding 20%. With last month's further declines, both the 10-city and 20-city home price indices are now back to levels last seen in late-2003.
If one looks in detail at the annual return data, it can be seen that 13 of the 20 MSA’s and the two composites have been reporting consecutive record declines since December 2007. The monthly data follows a similar trend, with all of the metro areas reporting at least four consecutive months of negative returns.