Two U.S. house price measures are released today. The first one, the S&P Case-Shiller house price index, showed yet another decline, which was a little worse than expected. House prices for the country's 20 largest metro areas fell 2.4% in January, the 18th straight drop in a row, and are now 10.7% below year-ago levels. The month-to-month and the year-over-year declines were the largest in this particular measure's 8-year history. Data for the 10 largest metro areas go back farther (to 1987) but the story was, yet again, the same. Prices were down 2.3% in January, or 11.4% y/y.
There is always lots of interest surrounding which areas were the hardest hit. Of the 20 metro areas, Charlotte is now the only areas with home prices not below year-earlier levels (they're up 1.8% y/y). Portland and Seattle had been above water in December but have now joined the ranks in negative territory. Miami and Vegas are neck-in-neck at -19.3% y/y, followed by Phoenix at -18.2% y/y. According to recent stories, foreclosed homes may have a hand in this, as banks are becoming more aggressive in pricing these homes appropriately and getting them sold.
The S&P Case-Shiller house price index is "the most reliable means to measure house price movements" as it measures repeat sales (it looks at the price for a single-family home that has been sold at least a couple of times before, in order to measure how much it has appreciated or depreciated) for all financing types (conforming, subprime, Alt-A1). Given that, further declines are coming ..the 3-month annualized trends are looking worse (-23.2% a.r. for the 20 major metro areas, and -23.7% a.r. for the 10).
The Bottom Line: U.S. house price deflation continues. Prices have to decline further to soak up the glut of homes for sale.
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Mark
A. Mark Argentino
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