Feb. 23, 2010
 
S&P/CASE-SHILLER: Home Prices Decline 2.5% in Fourth Quarter 2009 Vs. Q4 2008
 
By David M. Kinchen
Huntingtonnews.net Real Estate Writer
 
The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 2.5% decline in the fourth quarter of 2009 versus the fourth quarter of 2008, according to a report released Tuesday, Feb. 23, 2010.
 
Although the news is not great, it is better than the results reported in the third quarter, according to S&P, which conducts the leading measure of U.S. home prices, indicating that perhaps the bottom point for home prices has been reached or is near.
 
As of the 4th quarter of 2009, average home prices across the United States are at similar levels to what they were in the summer of 2003. The 4th quarter values fell when compared to the 3rd quarter; however, the decline in the annual rate of return has significantly improved.
 
This is a significant improvement over the annual rates reported in the first, second and third quarters of the year, at -19.0%, -14.7% and -8.7%, respectively. In December, the 10-City and 20-City Composites recorded annual declines of 2.4% and 3.1%, respectively. These two indices, which are reported at a monthly frequency, have seen improvements in their annual rates of return every month since the beginning of the year.
 
"As measured by prices, the housing market is definitely in better shape than it was this time last year, as the pace of deterioration has stabilized for now. However, the rate of improvement seen during the summer of 2009 has not been sustained," said David M. Blitzer, Chairman of the Index Committee at Standard & Poor's. "In the most recent months we are seeing fewer and fewer MSAs reporting monthly gains in prices. Only four cities saw month to month improvements in December over November, when you look at the raw data. We are in a seasonally slow period for home prices, however, so it is not surprising to see better statistics in the seasonally-adjusted data, where 14 of the markets and the two monthly composites all rose in December. Similarly, the National Composite fell by 1.1% in the fourth quarter, but rose by 1.6% on a seasonally-adjusted basis."
 
The 10-City and 20-City Composites continue to show improvement in their annual rates of return. In fact, all 20 metro areas and the two Composites saw improvement in their annual returns compared to November's data. Only three cities -- Detroit, Las Vegas and Tampa -- still showed double digit annual rates of decline as of the end of 2009. Miami, Phoenix and Seattle all moved above such rates with December's report.
 
Fifteen of the 20 metro areas showed a decline in December over November, with Chicago posting the sharpest decline, down 1.6%. Las Vegas finally posted its first positive print in more than three years, with +0.2%. The Southwest continues to be a bright spot, with San Diego posting its eighth consecutive monthly increase, and Los Angeles and Phoenix both posting their seventh. Three of the markets -- Charlotte, Seattle and Tampa -- posted new low index levels as measured by the past four years. In other words, any gains they might have seen in recent months have been erased and December is now considered their current trough value.