Case-Shiller ekes out gain despite decline in 12 of 20 markets

The S&P/Case-Shiller October 2009 house price index came out yesterday. The data showed plenty of reason to worry about the sustainability of the recent stabilization of house prices. While both the Composite-10 and Composite-20 indices showed miniscule gains, the broader picture is one of weakness.

Here are the key highlights.

  • The Composite-10 index was up to 158.82 from 158.61 and the Composite-20 was up to 146.58 from 146.51 the previous month.
  • The Composite-10 index was down 6.5% and the Composite-20 was down 7.3%. This compares favorably to 8.5% and 9.3% respectively for the September data released last month.
  • 8 of 20 markets showed an increase in house prices while 12 of 20 showed declines.
  • Denver and Dallas (marked in red below) are two markets now nearing year-on-year house prices gains.


October marks the sixth consecutive month of monthly gains in the Composite indices. And the year-on-year declines continue to fall.  However, month-on-month gains are now falling and the diffusion of price gains is weakening.  Last month I said:

When the Case-Shiller index began increasing in July, 14 of 20 markets were showing an increase. This number steadily increased as time wore on. Case-Shiller reported in August that 18 of 20 cities showed price increases. When Case-Shiller reported in September, 18 of 20 cities showed price increases.

Then, last month the number turned down slightly to 17 of 20 markets. This month the number really turned down. Only 10 of 20 markets rose in the data (for sales through September).  That is not good.  is this a one-month aberration?

No, it is not a one-off. Only 8 of 20 markets rose in the data (for sales through October). So, this is the third straight month in which we have seen a decline in the number of markets supporting house price increases.  These numbers are not seasonally-adjusted, so seasonality may be at play here.  Let’s see where we get to this winter.

  1. ozajh says

    On another blog it has been noted that the Case-Shiller index uses a rolling 3-month window, so ‘October 2009’ could more accurately be described as ‘August-October 2009’.

    It is entirely possible that the pure monthly numbers peaked in September (or August), and that the next few months will show small declines. As you point out, seasonal factors may come into play.

    IMHO the REAL test for the RRE ‘recovery’ will come next March . . .

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