Case-Shiller: green shoots, yes but pretty grim nonetheless

You might find some analysts looking for some green shoots in the just released Case-Shiller Home Price Index.  For instance, the year-on-year change in house prices showed a slower decline in the latest month (February) than in the previous release.

So, this report is better for homeowners than the last one which I surveyed in a post titled,”Case-Shiller offers up another depressing spectacle in U.S. housing.” But it is certainly nothing to write home about. Here are a few statistics.

  • The Composite-10 index is down 18.8% and the Composite-20 index is down 18.6% in the last year.
  • The Composite-10 index is down 31.6% and the Composite-20 index is down 30.7% peak-to-trough.
  • Pheonix is the worst city with declines of 50.8% peak-to-trough and 35.2% year on year.
  • Dallas is the best city with declines of 11.1% peak-to-trough and 4.5% year on year.
  • Detroit is the city with the largest number of months since we last saw prices this low. Prices were last this low in Mar. 1996.
  • Seattle and Charlotte are the cities with the fewest number of months since we last saw prices this low. Prices were last this low in Jun. 2005.
  • The markets most vulnerable i.e. with the highest index values are, in order: New York, Washington, LA, and Miami.


And, remember, home prices increases are still at levels inconsistent with the rise in inflation or rent over the last decade. So, for renters looking to jump in, we are really not there yet and that suggests that we have a way’s to go to bottom – maybe even to declines in excess of 50% nationwide (something I thought unlikely last year).  The good news, of course, is that when we do bottom, prices will be much more affordable for those who did not participate in the bubble and are looking to buy for the first time.

So, in sum, there are some green shoots here, yes, but, the residential property market in the U.S. is still pretty grim.

S&P/Case-Shiller Home Price Indices – S&P Website

  1. pwm says

    Price declines will seem to slow as the median property moves from subprime to non-subprime, with foreclosures cooling in the subprime space and surging in the prime, alt-A, and option ARM area. I suspect that this could lead to larger writedowns at the big banks than subprime did. Many of these larger mortgages are still being carried at nearly par. Many second mortgages are going to join the default parade, with nearly no recovery.

    I use this blog here to see what is in the foreclosure pipeline:

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