A Look at Case-Shiller Numbers, by Metro Area (July 2009 update) The S&P/Case-Shiller home-price indexes, a closely watched gauge of U.S. home prices, posted their first month-to-month increase in nearly three years in May, but annual weakness continued. In the 20-city index, no area experienced year-over-year price gains, the fourteenth straight month that has happened. Boston, Cleveland,... [more]
A Look at Case-Shiller Numbers, by Metro Area (July 2009 update)
The S&P/Case-Shiller home-price indexes, a closely watched gauge of U.S. home prices, posted their first month-to-month increase in nearly three years in May, but annual weakness continued.
In the 20-city index, no area experienced year-over-year price gains, the fourteenth straight month that has happened. Boston, Cleveland, Dallas and Denver were the only areas with annual declines under 10%. Every other metro area was in double digits.
However, 15 cities managed to avoid month-to-month declines, up from nine last month. Prices in Tampa and New York were flat, while just Los Angeles, Seattle, Miami, Phoenix and Las Vegas posted monthly declines.
Las Vegas and Phoenix continued to posted the largest monthly and annual declines. Phoenix is down 55% from its peak in June 2006, while Las Vegas is off 53% from its highest level. On the positive side, Dallas and Denver have reported three consecutive months of positive returns.
Ian Shepherdson of High Frequency Economics notes that the nose-dive in home prices that followed the collapse of Lehman Brothers and the intensifying credit crisis has begun to stabilize. %u201CThe plunge in prices reflected the freezing of credit and all-round panic, which generated a step decline in home sales. Activity is now recovering, and with inventory falling, prices are dropping much less quickly and could even rise a bit over the next few months.%u201D
Wells Fargo%u2019s John Silvia says the month-to-month pattern is more important than the steep annual declines. %u201COnce again TV commentators that emphasize the year-over-year numbers being down 17% are welcome to have their sarcasm but they are missing the point as well as the turn,%u201D he said. %u201CRecession is over, economy is recovering %u2014 let%u2019s look forward and stop the backward looking focus.%u201D
But Shepherdson says that while the plunge has stopped, sustained increases in home prices aren%u2019t likely in the cards. %u201CWe would not expect any gains to last, because prices are still high relative to incomes and rents, and also because the uptick in sales will, we think, prompt a new wave of supply,%u201D he said. %u201CBut this is still very welcome news today.%u201D
[less]
