The S&P/Case-Shiller Home Price Indices, released today by Standard & Poor's, show that while annual rates of price declines continue to improve, in spite of continued home price declines in many real estate markets in the month of November.
Yesterday's news of plunging existing homes sales did little to lift the spirits of real estate industry experts, and today's news of continued home price declines from Case-Shiller sends a mixed message about the fate of the U.S. residential real estate market.
The annual returns of the 10-City Composite Home Price Index shows a home price decline of 4.5% from November 2008 to November 2009.
The 20-City Composite Home Price Index shows a slightly larger home price decline of 5.3% from November 2008 to November 2009.
And yet, these home price indexes continue to show improvement in the housing market. For the past 10 months, beginning in early 2009, home price declines have been shrinking. November 2009 marks the third month in a row that home price declines were in the single digits, after 20 consecutive months of double digit declines.
"While we continue to see broad improvement in home prices as measured by the annual rate, the latest data show a far more mixed picture when look at other details," says David M. Blitzer, Chairman of the Index Committee at Standard & Poor's. "Only five of the markets saw price increases in November versus OCtober. What is more interesting is that four of the markets - Charlotte, Las Vegas, Seatle, and Tampa - posted new low index levels as measured by the past four years. In other words, any gains they might have seen in recent months have been erased and November is now considered their current trough value. On the flip side, there are still some markets that continue to improve month-over-month. Los Angeles, Phoenix, San Diego and San Francisco have seen prices increase for at least six consecutive months. Looking at the annual figures, four markets - Dallas, Denver, San Diego and San Francisco - have finally entered positive territory, something we really haven't seen in at least two years in most markets."
Blitzer acknowledges that we are in a seasonally weak period for home prices. When the home price data is seasonally adjusted, the information is generally more positive, with 14 of the markets and both composite indices showing improved prices in November 2009 compared with November 2008.
"On balance, while these data do show that home prices are far more stable than they were a year ago, there is no clear sign of a sustained, broad-based recovery," said Blitzer.
Written by Michele Lerner
HULIQ.com
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