For builders looking for a ray of sunshine in housing prices, it’s probably best they keep the sunglasses stowed away for another month. According to the latest Standard & Poor’s/Case-Shiller home price indices released Tuesday, the 10- and 20-city indices fell 1.2% and 1.3%, respectively, from September to October.
With the home buyer tax incentives ended, and the national economy still sluggish, “the trends we have seen over the past few months have not changed,” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor's. “Home prices across the country continue to fall. There is no good news in October’s report.”
According to the report, sales are down more than 25% and the months’ supply of unsold homes is about 50% above where it was during the same months of last year.
“The double-dip is almost here, as six cities set new lows for the period since the 2006 peaks,” added Patrick Newport, U.S. economist for IHS Global Insight. “However, eleven metro areas--Atlanta, Boston, Chicago, Cleveland, Dallas, Denver, Minneapolis, New York, Portland (OR), Seattle, and Washington DC are experiencing a triple-dip. These rollercoaster rides are related to the two tax credits.”
FHFA’s data released last week reported a 0.6% increase for the same period, however. That’s not surprising, in that the S&P/Case-Shiller typically reports different results, due to sampling differences. FHFA draws its data from Fannie Mae and Freddy Mac, which typically cover all 50 states and rural areas. Case-Shiller focuses more tightly on the 20 largest—and typically more expensive--metropolitan housing markets.
For the data of the remainder of the year, IHS’s Newport remains negative. “We expect house prices to drop another 6–8%.”
He then finishes with the words that every builder wants to hear: “…and then turn around in 2011.”
Matthew Phair is a Senior Online Editor
Learn more about markets featured in this article: Atlanta, GA.