Following on the heels of the release of the 2010 Census data that paints a picture of dwindling urban cores, home price data released today show home values in major metro areas following suit with declines that have the analysts at Standard & Poor’s and Case-Shiller calling a double-dip in home prices.
Both the S&P/Case-Shiller 10-city and 20-city composite indices recorded 1.1% declines in February, returning the 20-city composite to its cyclical low level—S&P’s definition of a double-dip. The 10-city composite, only 1.5% above its April 2009 cyclical low, isn’t far behind.
Ten metro areas—Atlanta, Charlotte, N.C., Chicago, Las Vegas, Miami, New York, Phoenix, Portland, Ore., Seattle, and Tampa, Fla.—also recorded cyclical lows. All but one of the 20 largest metro areas saw values fall from January, with Detroit (the metro area where prices have dropped the most and where home values now stand 30% below where they did in 2000) being the only gainer with a 1% increase.
On an annual basis, the 10-city composite dropped 2.6% from the previous year, and the 20-city composite fell 3.3%.
While S&P’s numbers only track the 20 largest metro areas, the alarm is resounding around the nation. Data released last week in the most recent FHFA house price index, which covers all U.S. markets, reported a price decline of 4% in the three most recent survey months, according to Patrick Newport, U.S. economist at IHS Global Insight. The FHFA index also saw price declines in every one of the U.S. Census divisions in February, the latest month for which data is available.
“There is very little, if any, good news about housing,” said David M. Blitzer, chairman of the Index Committee at S&P Indices, in a press release today. “Prices continue to weaken, trends in sales and construction are disappointing. … Recent data on existing-home sales, housing starts, foreclosure activity, and employment confirm that we are still in a slow recovery. Existing-home sales and housing starts rose in March, but remain close to recent lows. Foreclosure activity showed decreases in mortgage delinquencies in the fourth quarter of 2010, but are still close to historic highs. The nation [as a whole] and 34 states registered a decline in their unemployment rates for March.”
On a seasonally adjusted basis, Newport pointed out in a press release about the numbers, both indices don’t look as bad, only declining 0.2% in February. But his optimism didn’t last long.
“Going forward, weak demand, foreclosures, and a glut of homes for sale should translate into at least another 5% drop in the Chase-Shiller composite indices,” he wrote.
Claire Easley is senior editor, online, at Builder.