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S&P Case-Shiller Index Records Another Drop in Home Prices

March 29, 2011

S&P Case-Shiller Index Records Another Drop in Home Prices

03/29/2011 By: Carrie Bay

Data released this morning by Standard & Poor’s show that home prices are continuing to trend downwards.

The 10-city and 20-city composites of the S&P/Case-Shiller home price index fell 0.9 percent and 1.0 percent, respectively, in January 2011 when compared to the previous month.

The 10-city composite is down 2.0 percent from its January 2010 level, while the 20-city reading dropped 3.1 percent on a year-over-year basis.

San Diego and Washington D.C. were the only two markets to record positive year-over-year changes. However, San Diego was up a scant 0.1 percent, while Washington D.C. posted a healthier 3.6 percent annual gain.

The same 11 cities that had posted recent index level lows in December 2010, posted new lows in January.
“Keeping with the trends set in late 2010, January brings us weakening home prices with no real hope in sight for the near future” said David M. Blitzer, chairman of the index committee at Standard & Poor’s.

“These data confirm what we have seen with recent housing starts and sales reports,” Blitzer continued. “The housing market recession is not yet over, and none of the statistics are indicating any form of sustained recovery. At most, we have seen all statistics bounce along their troughs; at worst, the feared double-dip recession may be materializing.”

Blitzer explained that S&P defines a double-dip for home prices as seeing the 10- and 20-city composites set new post-peak lows.

He noted that the 10-city composite is still 2.8 percent higher and the 20-city is 1.1 percent above their respective April 2009 lows, but he warns that both series have moved closer to a confirmed double-dip for six consecutive months.

“At this point we are not too far off, and that is what many analysts are seeing with sales, starts, and inventory data too,” Blitzer said.


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