The S&P/Case-Shiller Home Price Indices for February registered their first year-over-year gain since December, 2006, S&P reported Tuesday. The 10-City Composite was up 1.4% and the 20-City Composite rose 0.6%, both compared with February, 2009, S&P said.

However, David M. Blitzer, chairman of the Index Committee at S&P, cautioned against reading too much into the numbers, saying, "It is too early to say that the housing market is recovering."

Blitzer explained that a four-month trend of fewer markets reporting year-over-year price declines ended in February and that six cities--Charlotte, Las Vegas, New York, Portland, Seattle and Tampa--hit new lows during the month.

"These data point to a risk that home prices could decline further before experiencing any sustained gains," Blitzer said. "While the year-over-year data continued to improve for 18 of the 20 MSAs and the two Composites, this simply confirms that the pace of decline is less severe than a year ago."

The problem, Blitzer said, is foreclosures, which S&P estimates are currently peaking. As those homes are resold, they are likely to exert downward pressure on prices. Moreover, the company last week put out a statement urging analysts of the home price data to beware of seasonally adjusted data, which has been skewed during the downturn by distressed sales and foreclosures.

That statement said, in part, "In some recent reports the two series have given conflicting signals, with the seasonally-adjusted series rising month-over-month and the unadjusted series declining. After reviewing the data, the ... Index Committee believes that, for the present, the unadjusted series is a more reliable indicator and, thus, reports should focus on the year-over-year changes where seasonal shifts are not a factor. Additionally, if monthly changes are considered, the unadjusted series should be used."

Average home prices across the United States in February had retreated to where they were in late summer/early autumn of 2003. From peak in summer2006 through trough in April 2009, the 10-City Composite was down 33.5% and the 20-City Composite down 32.6%. Peak-to-date through February for the two composites was -30.7% and -30.3%, respectively.

A single market, San Diego, showed a gain in prices from January to February, not seasonally adjusted. All the other metros, plus both composites, showed month-to-month declines in the non-adjusted data. The 10-City was off 0.6% sequentailly, the 20-City off 0.9%. The biggest drops came in Portland, -2.4%; Minneapolis, -2.2%; Cleveland, -2.1%; Chicago, -2%; Dallas, -1.8%; Phoenix, -1.5%, Atlanta, -1.3%; Tampa, -1.2% and Seattle, -1.1%. Boston and Charlotte each lost 1%, with the rest of the markets off between 0.4% (New York and Las Vegas) and 0.8% (Denver). Los Angeles was off 0.7%, San Francisco off 0.7% and Washington D.C. off 0.5%.

Half the markets also were down on a year-over-year basis: Atlanta, -0.9%; Charlotte, -2.5%; Chicago, -3%; Detroit, -5.4%; Las Vegas, -14.6%; Miamie, -4.4%; New York, -4.1%; Phoenix, -1.6%; Portland, -4.8%; Seattle, -5.6%; and Tampa, -6%. New York and Portland, which were the latest markets to hit new lows, were off 21% and 23% from peak.

Homes in Detroit are now worth 70.5% what they were in January of 2000.Cleveland homes are just about flat with that month. Las Vegas homes are still showing a 3.4% gain over the decade; in Atlanta, a 5.6% gain remains.

The three best performing markets remain Washington, propelled through the recession by government expansion, led all markets with an index of 176.49; Los Angeles was at 171.82; New York was at 170.46; San Diego was at 157.92; Boston was at 151.44. All other markets were below an index of 150, meaning a 50% gain in value over the decade of the 2000s.

S&P's Blitzer did take note of the recent flurry of positive housing related data in the Case-Shiller announcement. "Existing and new home sales, inventories and housing starts all show tremendous improvement in their March statistics," he said. "The homebuyer tax credit, available until the end of April, is the likely cause for these encouraging numbers and this may also flow through to some of our home price data in the next few months."

He added, "Amidst all the news, however, we should also pay heed to foreclosure activity, which have reached their highest level in at least the last five years."