Tuesday, February 26, 2008

S&P Case Shiller Home Price Index Shows Record Home Price Declines

The December 20-city index fell -2.15% MoM, and -9.1% YoY.  This was a slower pace of annual decline than consensus had expected of -9.7%, but still notably higher than the -7.7% annual drop reported in November.  The trend over the past three months shows acceleration with monthly declines of -1.4% in October and -2.1% in November, and -2.15% in December.  All 20 cities saw declines in December.  The smaller 10-city index, which is focused on cities that had larger price gains, saw a -2.3% MoM decline, and a -9.8% YoY drop. 
 
The largest monthly decline was Phoenix at -3.5% MoM, followed by San Diego, San Francisco and Los Angeles, which all had monthly declines of over 3%.  On an annual basis, Miami leads the decline with a fall of -17.5% YoY, followed by Phoenix at -15.25% YoY.  Other cities seeing double digit annual declines include San Diego, Tampa, Detroit, Los Angeles and San Francisco.
 
The national 4th quarter Case-Shiller data shows a -5.36% quarterly drop, and a much larger than expected decline of -8.9% YoY (consensus -6.5-7%).  The quarterly drop, when annualized, equates to almost a 20% annual price decline.
 
The Case-Shiller index includes homes from all price ranges and is based on actual selling prices for individual properties.  The national figure is based on a composite index of major markets weighted by their capitalization. 

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