US Home Prices Fall for Fifth Consecutive Month

U.S. home prices show a deceleration in the annual growth rates in 17 0f 20 MSAs and the 10- and 20-City Composites compared to what was reported for October 2010 according to the latest S&P/Case-Shiller Home Price Indices.  It’s the fifth consecutive drop in home prices, falling to the lowest levels since June 2009.

The 10-City Composite was down 0.4% and the 20-City Composite fell 1.6% from their November 2009 levels. Home prices fell in 19 of 20 MSAs and both Composites in November from their October levels.  During November, only Los Angeles, San Diego, San Francisco and Washington, DC, showed year over year gains.

Composite indices remain above their spring 2009 lows; however, Atlanta, Charlotte, Detroit, Las Vegas, Miami, Portland (OR), Seattle and Tampa hit their lowest levels since home prices peaked in 2006 and 2007, meaning that average home prices in those markets have fallen even further than the lows set in the spring of 2009.

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David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s, said the numbers mean more analysts will be calling for a double dip in home prices.

“Let’s take a moment to define a double-dip as seeing the 10- and 20-City Composites set new post-peak lows,” he said.  “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. Certainly eight cities setting new lows, and with the only positive news concentrated in southern California and Washington DC, the data point to weakness in home prices.”

“With an annual growth rate of +3.5% in November, Washington DC was the strongest market, but still well below the +7.7% annual rate of growth seen in May 2010. The only city with a gain in November was San Diego, up a scant 0.1%. While San Diego, Los Angeles and San Francisco are still ahead from November 2009, their annual rates are shrinking in recent months.

“Looking at the monthly statistics, 19 of 20 MSAs and both Composites were down in November over October. Fourteen MSAs and both composites have posted at least four consecutive months of decline with November’s report. Thirteen of the MSAs and the 20-City Composite fell by 1.0% or more in November. While not always consecutive months, 13 of the MSAs and both composites have posted at least seven months of decline since the beginning of 2010. These markets saw home prices fall more than half the months reported in 2010 so far.”

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  • The housing trend is fascinating. California, particularly Southern California has generally either outshined the vast majority of the nation or gone down and stayed down when the vast majority of the rest of the nation is going up. Here on the southern “left” coast our contra trends create a different feeling about the economy and the country.

    This report is not even good when it comes to the Texas housing market. Generally most home values in that state (or as some call it “that other country”) usually just plod along with some hits and some misses.

    As to the HECM market, home value is becoming an ever greater factor in the return of the Standard marketplace. Nothing, absolutely, nothing will take this trend up so significantly that FHA Case Number assignments will shoot up the volume significantly up before May 31, 2011, the presumed end of the new originations which will be endorsed before the end of the current fiscal year.

    I wish my tea leaves would indicate when housing values will trend up. Of course, if my tea cup could do that there would be no end of my personal wealth but such is not the case.

    Like Texas home values it seems as if HECM endorsement levels will be stuck in a rut if not declining. With more calls of pending double dip declines in home values throughout more housing markets, the direction of home values does not look promising.

  • The housing trend is fascinating. California, particularly Southern California has generally either outshined the vast majority of the nation or gone down and stayed down when the vast majority of the rest of the nation is going up. Here on the southern “left” coast our contra trends create a different feeling about the economy and the country.

    This report is not even good when it comes to the Texas housing market. Generally most home values in that state (or as some call it “that other country”) usually just plod along with some hits and some misses.

    As to the HECM market, home value is becoming an ever greater factor in the return of the Standard marketplace. Nothing, absolutely, nothing will take this trend up so significantly that FHA Case Number assignments will shoot up the volume significantly up before May 31, 2011, the presumed end of the new originations which will be endorsed before the end of the current fiscal year.

    I wish my tea leaves would indicate when housing values will trend up. Of course, if my tea cup could do that there would be no end of my personal wealth but such is not the case.

    Like Texas home values it seems as if HECM endorsement levels will be stuck in a rut if not declining. With more calls of pending double dip declines in home values throughout more housing markets, the direction of home values does not look promising.

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