US Home Prices Fall in September says S&P Case Shiller

After rising 4.7 percent in the second quarter, home prices in the US fell 2 percent in the third quarter of 2010 according to S&P/Case-Shiller data.

Prices have moved up 0.6 percent in the past year, down from 1.7 percent in August, making it the fourth consecutive month where annual growth rates moderated from the prior month’s pace, confirming a “clear deceleration in home price returns,” S&P said. Home prices decreased in 18 of the 20 metropolitan areas tracked by Case-Shiller in September compared with August

In September, 18 of the 20 MSAs covered by S&P/Case-Shiller Home Price Indices and both monthly composites were down; and only the two composites and five MSAs showed year-over-year gains. While housing prices are still above their spring 2009 lows, the end of the tax incentives and still active foreclosures appear to be weighing down the market.



“Another weak report; weaker than last month. The national index is down 1.5% from the third quarter of last year and 15 of 20 cities are down over the last 12 months. Other than Tampa, FL, there are no new lows this month but many analysts will argue that a double dip will be confirmed before Spring. While some of the bad numbers may reflect the end of the government’s tax incentive for first time home- buyers, there are other problems weighing on the housing market.” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s.

“The national economy is certainly the number one issue for housing. Additionally, there is a large supply of houses on the market and further, hidden, supply due to delinquent mortgages, pending foreclosures or vacant homes. New construction is running at less than half the pace needed to meet normal demand, so a sustained recovery could be a ways off.”

“Looking deeper into the data, in the monthly indices, 18 MSAs and both Composites were down in September over August. This is worse than August when 15 were down month-to-month. The only two which weren’t down in September were Las Vegas, which managed to stay a touch above the low set in July, and Washington DC. Overall, there are few, if any, good numbers in this month’s data.”


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  • As usual housing experts do not discuss pent up inventory. That is the homes which do not have mortgages in default and the owners want to move but will not sell at current prices.
    Some economists believe that the other motives for selling will become more urgent or will grow in importance over time. This could pour even more homes into the market before the market can absorb all existing inventory plus that which will otherwise come on the market in the next 18 months such as through foreclosure, etc.
    Yes, most sellers in the current pent up category will buy other homes but NOT until their old homes are sold. They will have more contingencies and stipulations in their sales contracts than those related to short sales, foreclosed property sales, and trustee sales, leading to homes which are difficult to move through the market. This will further clog inventory and will have a tendency to erode home price appreciation.
    Home price appreciation will help our industry but other than sales managers, most prognosticators do not expect to see any substantial increase in appreciation rates until 2013. “Tell me it ain’t so Joe!!!”

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