Altos Research: Home Prices Down 1.63% in December 2010

The earliest housing price indicator released for December 2010 is indicating a 1.63% decline in home values.  The headlines:

The first week of January marks the seasonal low point for home sales, new listings, and closings, as weather and holiday celebrations keep buyers and sellers from the market. This year is no different; prices and inventory are down for the lion’s share of the nation’s regional markets.

In December 2010, the Altos 10-City Composite price decreased by 1.63% to $448,996. Prices were down in each of the 27 markets tracked in the report, with the most notable changes seen in San Francisco, San Diego, and Minneapolis. As is consistent with seasonal declines, housing inventory was markedly down across the country, with the most significant changes showing in Boston, San Francisco, and Seattle.

December 2010 Highlights

  • The Altos 10-City Composite is now at $448,996, off 1.63% from last November 2010.
  • All 27 of the major markets tracked by the report showed seasonal price decreases. Most were relatively minor, with the steepest declines seen in San Francisco (down 4.77%), San Diego (down 3.71%), and Minneapolis (down 3.16%), respectively.
  • Housing inventory is off by 5.89% nationwide, with dramatic decreases in several major markets, including Boston, San Francisco, and Seattle.
  • The declines shown reflect expected seasonal downturns.

This month’s featured chart highlights the difference in pricing of newly listed properties vs. the prices of the market as a whole. Note two trends in the following chart: First, the major January 1 dip implies a weaker Q1 than in 2009 or 2010 when the federal tax credit artificially boosted buyers. Next notice that the first inklings of the stability for the full year will be evident before January completes. In 2009, the market responded aggressively to the tax credit. 2010 was a weaker response but still bounced off the trough of January 1. Look to this space next month when we’ll report on the 2011 signs.

Altos’ data is significant in that it is showing a downward trend line in new listings.  The expectations of home sellers is continuing to fall.   It should be noted that this data is not seasonally adjusted – and home prices normally fall in December.  Case-Shiller and CoreLogic home price indicators have been updated through October 2010, while the NAR is updated through November 2010.

The Altos data suggests continuing home price decline from the other indicators through the end of 2011.   Econintersect believes this is the second home price dip which will continue during 2011.

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