Case-Shiller Home Prices Mixed
The S&P/Case-Shiller Home Price index in October rose in just seven of 20 cities. In the past year, prices are down 7.3% in the 20 cities. Prices in all 20 cities were lower in October 2009 than in October 2008. The figures are not seasonally adjusted.
Only seven of the 20 metro areas showed month-over-month improvement. The turn-around in home prices seen in the spring and summer has faded, according to S&P chief economist David Blitzer, who described the latest Case-Shiller data as flat.
As of October 2009, average home prices across the U.S. are at similar levels to where they were in the autumn of 2003.
Las Vegas was the only market that has not seen any improvement in 2009. Prices have declined for 38 consecutive months. Las Vegas is just 5% above its January 2000 level.
On the plus side, San Francisco has had seven consecutive months of positive returns; San Diego has reported six; and Los Angeles and Phoenix are close behind with five.
San Diego Home Prices – Case-Shiller Home Price Index
San Diego home prices
The good housing news was that according to the Case-Shiller home price index released today by Standard & Poor’s, U.S. homes in 20 major cities rose by 1.2% in August compared with July, the fourth monthly increase in a row. For August, prices rose in 17 of 20 cities. Only Charlotte, Cleveland and Las Vegas recorded month-to-month declines.
The bad housing news part of this report was that in the past year, prices are down 11.3% in the 20 cities. Prices in all 20 cities were lower in August 2009 than in August 2008. Read more 
Home Prices Are Back to 2002 Levels
As of March 2009, average home prices across the United States are at similar levels to what they were in the fourth quarter of 2002. From the peak in the second quarter of 2006, average home prices are down 32.2%.
The S&P Case-Shiller National Home Price Index fell 19.1% in Q1, the sharpest drop in history. Charlotte, NC did best, rising 0.3% while Detroit, where prices have fallen to 1995 levels, did the worst at -4.9%. San Francisco came in at -2.2%.
The 20 city index peaked in July, 2006 at an index value of 206.5 and the March reading stood at 140.00, making for a 32% drop from the peak.
Given the pace of decline, I do not think it is out of the question for for a peak to trough drop in the 45% range.
Housing prices must be at 3 times to 4 times annual household income and maybe even lower if we have a generation of stay at home mothers….to me..prices are getting back to where they belong and square footage on new construction will fall from palatial levels of the past decade… San Diego housing
Home Prices Fall 19.1%
San Diego home prices
Today, the Standard & Poor’s/Case-Shiller National Home Price index reported home prices fell by 19.1 percent in the first quarter. This drop was the largest drop in the 21-year history of the Case-Shiller index. Compared with a month earlier, home prices decreased 2.2 percent in March, also the same as in February, today’s report showed.
David M. Blitzer, chairman of the S&P index committee said: “We see no evidence that a recovery in home prices has begun”.
The largest year-over-year declines in March, were in Phoenix prices down 36%, Las Vegas off 31.2% and San Francisco dropping 30.1%. Here in San Diego, the report showed the one year drop to be off 22%.
There is only another three months of the prime real estate selling season. What is going to happen in the fall and winter months to this industry?
I would think that this news will put an end to the talk of a bottom for the San Diego real estate market this year! San Diego real estate agents
Real Estate Market News … Positive & Negative
CNBC's Jim Cramer recently interviewed Toll Brothers CEO Robert Toll and his take on the national housing market got a lot of play. The homebuilder said he see signs of a rebound in "80% of the country." He backs this up by reporting that "expressions of interest" ($1,000 refundable deposits) are up over last year.
Countering this positive news was another negative S&P/Case-Shiller home price index. Case-Shiller has been heavily criticized lately from experts who doubt whether limiting the data to 20 selected metro areas gives an accurate picture of price changes across the country. Many of these areas have been heavily affected by foreclosure sales. At least the latest Case-Shiller did NOT set a new record low – for the first time in 16 months!
Last Thursday it was reported the rate for 30-year fixed-rate conforming mortgages averaged 4.78% with an average 0.7 point. It's down over 1.6% from the peak in October, which adds up to a savings of around $212 per month on a $200,000 loan. It should be noted these rates and fees are for borrowers with 20% down payments and good credit ratings. Other loans carry higher rates and points.
>> Review of Last Week
BACK ON TRACK… The major stock market indexes went up again last week, as they did for six straight weeks until some minor slippage the week before. This was encouraging because there were a few fairly negative pieces of news, although positive indicators prevailed as the week wore on. The negatives started with Sunday's concerns over a swine flu outbreak, which stayed in the headlines throughout the week. Thankfully, there were only 331 worldwide cases confirmed by Friday.
Other off-putting news included Wednesday's advanced Q1 GDP reading of –6.1%, worse than expected. Thursday, Chrysler declared bankruptcy to ease its debt burden, though it seems poised for recovery with a deal that gives Fiat a big stake in the company. We also had reports that Bank of America and Citigroup may have to rai se more capital based on their stress tests. Friday, the government said it would postpone publishing full stress test results until this Thursday.
The week's good news? April's ISM Manufacturing index surpassed expectations for the fourth month in a row! Some economists say this shows the contraction in manufacturing is quickly slowing and the overall economy is on the verge of recovery. This view was bolstered by a better than expected reading on manufacturing from the Chicago PMI. Consumer Confidence was well above estimates and the University of Michigan's consumer sentiment index also had a big boost for April. Some experts feel this shows Q1's increase in consumer spending will continue.
The Dow ended the week UP 1.7%, to 8212.41; the S&P 500 was UP 1.3%, to 877.52; and the NASDAQ went UP 1.5%, to 1719.20.
Inflation concerns and the stock market's resurgence all slowed demand in the bond market and drove prices down. So the benchmark 10-year Treasury's yield, which runs counter to price, inched up again, to 3.176%. In spite of this rise, mortgage rates on average are still at historically low levels. This post information was provided by: Greg Brooks southwest area manager San Diego Mortgage Network (800) 287-8292 x 225 San Diego real estate
San Diego Home Values … Good News, But Still Declining
San Diego home values seem to have slowed their rate of decline. From December to January San Diego homes saw a 2.6% decline according to Case-Shiller/Standard & Poor's most recent data. Yet, the San Diego home value drop from January to February was only 1%!
Bob Toll stated recently that, other than in the worst four markets in the country (Southern Cal, Las Vegas, Phoenix, and Florida) they are seeing a firming of the housing market and expect an upswing in activity (and prices) sometime over the summer months. He said that inventories have largely been absorbed in most markets. He said the four afore mentioned locals have a ways to go before stabilization due to their large excess inventories of housing stocks.
Keep in mind, if you reduce housing prices 30% and reduce interest rates from 7% to 5%, you have just reduced the payment level on a 30 year fixed rate mortgage by 45% – what wasn't affordable suddenly become quite affordable.
That's the good news, the flip side, is that for the year San Diego home values fell 22.9%
There are still billions of dollars worth of 'liars loan' alt-a mortgages that have yet to reset and will perform even worse than subprime. You cannot even begin to think of a bottom when we have yet to pass the bulk of these alt-a resets.
Not to mention the hundreds of thousands of units of shadow inventory owned by banks but yet to be put up for sale.
What about declining incomes and employment levels.
It's going to be hard for a bottom in housing to come without a bottom in job numbers and an increase in wages.
Anyone who points to the latest Case-Shiller data as an indication of a housing turnaround is really grasping at straws.
We are merely at the normal "Spring" inflection point. As soon as the normal selling season hype wears off (probably by July) housing prices may resume their crushing descent downward. Housing is an incredibly slow-moving asset class, so don't worry that you will miss the bottom (it may well be 1 – 2 years off).