Case-Shiller Index: Less bad, but three markets cut in half

The S&P/Case Shiller Home Price Indices for April 2009 were released today.  The Composite-10 and Composite-20 indices showed a 18.0% and 18.1% decline respectively, making the data less bad than in the previous month.  Nevertheless, there is still considerable weakness, particularly in former bubble cities like Phoenix, Las Vegas, and Miami.  There, prices have been cut in half, with Phoenix now down 54.1% from the peak, Las Vegas down 52.1% and Miami down 48.1%.

Yet, this month does mark a large shift in directionality with 8 markets showing increased prices from March to April. The most inflated market now showing price upticks is Washington, where there was a large surge, perhaps due to the change in Administration. In fact, Washington D.C. is now the second most expensive market relative to prices at the beginning of this decade, with prices having risen a full 67% despite a 33% decline in values. New York is the most expensive market by this measure, prices having risen over 70%. However, prices in the NY area are now falling.

Case Shiller 2009-04

I should note that these data are from April. If the trend holds, we would expect to see more markets shifting to price rises in May and June.  What is striking is that most of the bubble markets are still in decline: Phoenix, LA, San Diego, Miami, Tampa, and Boston.  However, San Francisco has turned up, as has Washington. And many non-bubble markets are now seeing house price appreciation.

In the UK, price appreciation started in March and has continued to the most recent survey (see post here).  If the U.S. is following the same pattern, it suggests price declines are now moderating. To the degree that Washington, a market which is still very overpriced, leads the upturn in prices, one can see this as a sign that government largesse bears a large responsibility for the change in trend.

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