Case Shiller data points to decreasing prices at an increasing rate


Home prices are dropping at an increasing rate according to the S&P Case-Shiller index that shows a -0.9% drop for October in their 10 city composite. Note this index is a three-month average, which in this case smoothes out the depth of October's decline. Declines in the unadjusted readings, reflecting price discounting during cold months, are slightly more severe. October's drop follows three prior declines for the adjusted index: -0.8% in September, -0.5% in August, and -0.1% in July.

Year-on-year, sales are up 0.2% for the 10-city adjusted index but are down 0.8% for the 20-city index which is being depressed by mid-single digit declines for Atlanta, Detroit and Portland. Phoenix, Charlotte and Seattle, also part of the 20 index, also show sizable on-year declines.

The appearance of on-year declines in this report, which is noted for its breadth and accuracy, raises the risk of a pivotal downshift in home prices. Yet the outlook for home prices isn't completely negative given price gains in last week's reports on existing homes and new homes and also the FHFA house price index. Markets are showing no significant reaction to today's report.

But this goes to highlight what we have been telling you here at this blog for over a year. Housing has been a bad investment this year. Those who though they would jump into properties to take advantage of the price dropping, wish they hadn't. That's something we warned about earlier this year.

Source Bloomberg
Metropolitan Area
Level
Change Oct/Sept
Change Sept/Aug
Change YOY
Atlanta
103.3
-2.90%
-2.30%
-6.20%
Boston
154.35
-1.20%
-1.30%
-0.20%
Charlotte
114.06
-1.10%
-1.00%
-4.20%
Chicago
122.28
-2.00%
-1.50%
-6.50%
Cleveland
102.2
-1.50%
-3.00%
-2.60%
Dallas
116.16
-1.10%
-1.60%
-3.10%
Denver
126.59
-0.60%
-1.00%
-1.80%
Detroit
68.86
-2.50%
-1.30%
-5.50%
Las Vegas
100.97
-0.20%
0.10%
-3.60%
Los Angeles
174.05
-0.70%
-0.10%
3.30%
Miami
144.03
-1.10%
-1.20%
-3.40%
Minneapolis
121.3
-1.90%
-2.10%
-2.80%
New York
171.5
-1.60%
-0.50%
-1.70%
Phoenix
105.97
-1.10%
-1.50%
-4.30%
Portland
142.16
-1.50%
-1.90%
-5.20%
San Diego
159.99
-1.50%
-1.00%
3.00%
San Francisco
138.84
-1.90%
-0.90%
2.20%
Seattle
143.13
-1.30%
-0.60%
-4.10%
Tampa
135.21
-0.90%
-0.80%
-3.60%
Washington
186.67
-0.20%
-0.10%
3.70%
Composite-10
159.03
-1.20%
-0.60%
0.20%
Composite-20
145.32
-1.30%
-0.80%
-0.80%

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