Case Shiller: Home Prices are Stable

According to the S&P/Case-Shiller Home Price Indices, home prices remained stable in July 2010.   Part of their press release:

Data through July 2010, released today by Standard & Poor’s for its S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home prices, show that the annual
growth rates in 16 of the 20 MSAs and the 10- and 20-City Composites slowed in July compared to June 2010. The 10-City Composite is up 4.1% and the 20-City Composite is up 3.2% from where they were in July 2009. For June they were reported as +5.0% and +4.2%, respectively. Although home prices increased in most markets in July versus June, 15 MSAs and both Composites saw these monthly rates moderate in July.

…….the annual returns of the 10-City and 20-City Composite Home Price Indices with increases of 4.1% and 3.2%, respectively, in July 2010 compared to the same month in 2009. With July’s data, 10 of the 20 MSAs are reporting negative annual growth rates. With June’s report only five cities were negative on an annual basis – Atlanta, Cleveland, Dallas, Denver and Portland all fell back to reporting declining annual growth rates. The three cities in California, Los Angeles, San Diego and San Francisco, showed the strongest annual growth rates of +7.5%, +9.3% and +11.2%, respectively; but these too are weaker than June’s print.

“Home prices crept forward in July. Ten of the 20 cities saw year-over-year gains and only one – Las Vegas – made a new bottom, as the impact of the first time home buyer program continued to fade away,” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. “The year-over-year growth rates for 16 of the cities and both Composites weakened in July compared to June. While we could still see some residual support from the homebuyers’ tax credit, which covers purchases closing through September 30th, anyone looking for home price to return to the lofty 2005-2006 might be disappointed. Judging from the recent behavior of the housing market, stable prices seem more likely.

“In the monthly data, 12 of the 20 MSAs and the two Composites were up in July over June; but the monthly rates also seem to be weakening. The next few months may give us an idea of the true strength of the housing market, as the temporary economic stimuli will have ended. Housing starts, sales and inventory data reported for August do not show signs of a robust market, and foreclosures continue.”

The following graph is the unadjusted housing price data comparing Case Shiller to the National Association of Realtors (NAR) data:

Case Shiller uses different methodology than the NAR.  In my opinion, both methodologies are equally good (and bad) – just a different way of slicing the pie.  The opinion of S&P/Case Shiller is in conflict with Econintersect’s views as our opinion is that the market has more downside.

It may take another four years for the housing market to bottom.  Please read Where is the Bottom for Housing? We May Not Know for Years

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