Weak home price reports suggest double dip could occur By Zach Fox The evidence that a double dip in housing could occur is mounting. A pair of closely watched home price indexes both showed that values in November 2010 were lower than the year-ago month and failed to improve month to month. Standard & Poor's said Jan. 25 that both the 10-city and 20-city composites in its S&P/Case-Shiller... [more]
Weak home price reports suggest double dip could occur
By Zach Fox
The evidence that a double dip in housing could occur is mounting. A pair of closely watched home price indexes both showed that values in November 2010 were lower than the year-ago month and failed to improve month to month.
Standard & Poor's said Jan. 25 that both the 10-city and 20-city composites in its S&P/Case-Shiller Home Price indexes were down on a year-over-year basis in November. In October, the 10-city index was still in positive territory.
The November report showed the 10-city composite was down 0.4% and the 20-city composite was off 1.6% from November 2009 levels. On a month-to-month basis, the 10-city index fell 0.8% and the 20-city index declined 1.0%.
David Blitzer, chairman of the index committee, said in a news release that the report will lead to more analyst predictions of a housing double dip. Blitzer defines a double dip as new post-peak lows for the 10- and 20-city composites.
"The series are now only 4.8% and 3.3% above their April 2009 lows, suggesting that a double-dip could be confirmed before Spring," Blitzer said.
Separately, the Federal Housing Finance Agency said Jan. 25 that its monthly house price index for November 2010 was down 4.3% from the year-ago month and sits at 14.9% below the April 2007 peak.
Compared to October, the November numbers were unchanged on a seasonally adjusted basis. The agency downwardly revised the October change to a 0.2% gain from the previously reported 0.7% increase.
Geographically, both reports showed widespread weakness in home prices.
Standard & Poor's reported that just four of the 20 metropolitan areas in its indexes posted year-over-year gains: Los Angeles, San Diego, San Francisco and Washington. On a month-to-month basis, 19 of 20 metros posted home price declines while the only increase — San Diego — was a modest 0.1% uptick.
Further, eight markets reached new cyclical lows: Atlanta, Charlotte, Detroit, Las Vegas, Miami, Portland, Ore., Seattle and Tampa, Fla. Blitzer added that 13 of the metros and both composite indexes have posted seven months of declines since the beginning of 2010.
The FHFA report showed similar trends, reporting a year-over-year decline in home prices in all nine U.S. Census divisions, with the Mountain division posting the largest drop at 11.2% and New England and West South Central tied for the most modest decline at 1.2%.
On a month-to-month basis, the agency showed several division posted gains, led by a 1.3% bump in the West South Central. The Mountain division also posted the largest month-to-month decline with a 1.9% dip in November 2010.
-- SNL Financial
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