May 31, 2011 (Chris Moore)
Home prices ran deeper into negative territory in the first quarter of 2011 according to the just released S&P/Case-Shiller Home Prices Indices (HPI), as the leading measure of home prices in the U.S. declined by 4.2 percent following the previous quarter’s 3.6 percent decline. Average home prices nationally are now back to mid-2002 levels.
According to the HPI, 19 of the 20 MSAs suffered price declines compared to the same quarter of last year. Washington D.C. was the only area where home prices increased in both month-over-month and year-over-year comparisons. Prices were up 1.1 percent for the month and 4.3 percent over the same time last year.
The 20-City Composite posted an index value of 138.16 which is the lowest the Composite has been since April 2009 when it stood at 139.26.
The Minneapolis area saw the largest decline at 10 percent, the first city since March 2010 to experience double digit declines in year over year comparisons. Phoenix followed with an 8.4 percent decline with Portland (-7.6%), Chicago (-7.6%), and Seattle (-7.5) percent rounding out the top five. Ironically, Seattle was the only other city that experienced a month-over month price increase of 0.1 percent.
“This month’s report is marked by the confirmation of a double-dip in home prices across much of the nation. The National Index, the 20-City Composite and 12 MSAs all hit new lows with data reported through March 2011. The National Index fell 4.2% over the first quarter alone, and is down 5.1% compared to its year-ago level. Home prices continue on their downward spiral with no relief in sight.” says David M. Blitzer, Chairman of the Index Committee at S&P Indices.
Twelve of the 20 MSAs, Atlanta, Charlotte, Chicago, Cleveland, Detroit, Las Vegas, Miami, Minneapolis, New York, Phoenix, Portland (OR) and Tampa, fell to their lowest levels as measured by the current housing cycle.
The report attributes the price increases seen in late 2009 and early 2010 to the first time home buyers tax credits and says, excluding the results of the government intervention, there has in actuality been no recovery in the stabilization of home prices during or after the recession.
Four MSAs, Atlanta, Cleveland, Detroit and Las Vegas, are seeing home prices below January 2000 levels with Phoenix nearly at that same level.
You can read the entire report on Standard and Poor’s website.
Tags: Standard & Poor, S&P, Case-Shiller, Home price Indices, HPI, housing prices, MSA, pricing declines, downward spiral, double-dip