Case-Schiller Home Data Goes Up–To Zero

The S&P-Case-Schiller housing data for February looked good year-over-year. Otherwise, most of the numbers were relatively poor.

The research showed that “the annual rates of decline of the 10-City and 20-City Composites improved in February compared with January 2010. For the first time since December 2006, the annual rates of change for the two Composites are positive. The 10-City Composite is up 1.4% from where it was in February 2009, and the 20-City Composite is up 0.6% versus the same time last year. However, prices of 11 of the cities in the larger 20 city measurement universe dropped year-over-year.”

On a more granular lever:

As of February 2010, average home prices across the United States are at similar levels to where they were in late summer/early autumn of 2003. From their peak in June/July of 2006 through the trough in April 2009, the 10-City Composite is down 33.5% and the 20-City Composite is down 32.6%. The peak-to-date figures through February 2010 are -30.7% and -30.3%, respectively.

Prices continued to fall sharply and most of the declines were in cities already hit hard.

The one-year drop in home values in Las Vegas was 14.6%, Detroit was down 5.4% for the same period. Miami was down 4.4% and Tampa 6%.

The information points to the fact that home price have not found a bottom in many part of the nation and that the $75 billion in money the federal government is spending on housing is doing little to help. The only argument that Congress and the Administration can make is that it would have been worse.

But, defaults remain high, even for those who have received mortgage modifications. Eleven million homes have underwater mortgages, and mortgage interest rates are rising. Banks will only make home loans to the most creditworthy In combination, these factors will undermine home prices, perhaps for years.

Douglas A. McIntyre

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