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Home prices are falling in most
major US cities, and the average prices in four of them are at their lowest
point in 11 years. Average price back to 2003 levels while Detroit and Las Vegas
are below Jan 2000 levels.
Data through January 2011, released today by Standard & Poor’s
for its S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home
prices, show further deceleration in the annual growth rates in 13 of the 20
MSAs (metropolitan statistical areas) and the 10- and 20-City Composites
compared to the December 2010 report. The 10-City Composite was down 2.0% and
the 20-City Composite fell 3.1% from their January 2010 levels. San Diego and
Washington D.C. were the only two markets to record positive year-over-year
changes. However, San Diego was up a scant 0.1%, while Washington DC posted a
healthier +3.6% annual growth rate. The same 11 cities that had posted recent
index level lows in December 2010, posted new lows in January.
The chart above depicts the annual returns of the 10-City and
the 20-City Composite Home Price Indices. In January 2011, the 10-City and
20-City Composites recorded annual returns of -2.0% and -3.1%, respectively. On
a monthly basis, the 10-City Composite was down 0.9% and the 20-City Composite
fell 1.0% in January versus December 2010. Only San Diego and Washington DC
posted positive annual growth rates in January 2011. These are the only two
cities whose annual rates remained positive throughout 2010. Every other MSA has
either moved back into or has always been in negative territory during the
recent housing crisis. On a monthly basis, Washington DC was the only market
where home prices rose in January, but up only 0.1%. The remaining 19 MSAs and
both Composites fell during the month, with 12 of the markets and the 20-City
Composite down by at least 1.0% versus December 2010.
“Keeping with the trends set in late 2010, January brings us
weakening home prices with no real hope in sight for the near future” says
David M. Blitzer, Chairman of the Index Committee at Standard & Poor's. “With
this month’s data, we find the same 11 MSAs posting new recent index lows. The
10-City and 20-City Composites continue to decline month-over-month and have
posted monthly declines for six consecutive months now.
“These data confirm what we have seen with recent housing
starts and sales reports. The housing market recession is not yet over, and none
of the statistics are indicating any form of sustained recovery. At most, we
have seen all statistics bounce along their troughs; at worst, the feared
double-dip recession may be materializing. A few months ago we defined a
double-dip for home prices as seeing the 10- and 20-City Composites set new
post-peak lows. The 10-City Composite is still 2.8% above and the 20-City is
1.1% above their respective April 2009 lows, but both series have moved closer
to a confirmed double-dip for six consecutive months. At this point we are not
too far off, and that is what many analysts are seeing with sales, starts and
inventory data too.
“Looking across some of the markets, we see that with a
January 2011 index level of 99.59, Atlanta has joined Cleveland, Detroit and Las
Vegas as markets where average home prices are now below their January 2000
levels. Washington DC appears to be the only market that has weathered the
While it was up only 0.1% for the month of January, it’s
annual rate was a relatively healthy +3.6%, it is still +10.7% above its March
2009 low, and ranks number one among the 20 markets as its average value is
almost 85% above its January 2000 level.”
As of January 2011, average home prices across the United States
are back to the levels where they were in the summer of 2003. Measured from
their peaks in June/July 2006 through January 2011, the peak-to-current decline
for the 10-City Composite and 20-City Composite is -31.7% and -31.8%
respectively. The improvements from their April 2009 trough are +2.8% and +1.1%,
Continuing the trend set late last year, S&P witnessed 11 MSAs
posting new index level lows in January 2011, from their 2006/2007 peaks. These
cities are Atlanta, Charlotte, Chicago, Detroit, Las Vegas, Miami, New York,
Phoenix, Portland (OR), Seattle and Tampa. These same 11 cities had posted lows
with December’s report, as well.
In January, the 10-City and 20-City Composites were down 0.9%
and 1.0%, respectively, from their December 2010 levels. The monthly statistics
show that 19 of the 20 MSAs and both the 10-City and 20-City Composite were down
in January 2011 versus December 2010, the only exception being Washington D.C.
which posted a month-over-month increase of 0.1%. Seventeen of the 20 MSAs and
both Composites have posted more than three consecutive months of negative
monthly returns. In January 2011, 12 of the 20 MSAs and the 20-City Composite
are down by more than 1% compared to their levels in the previous month.
The table below summarizes the results for January 2011. The
S&P/Case-Shiller Home Price Indices are revised for the 24 prior months, based
on the receipt of additional source data. More than 24 years of history for
these data series is available, and can be accessed in full by going to
A breakdown of the results, with Maureen Maitland, Standard & Poor's vice president of index services: