There are lots of ways of looking at today’s release of the S&P/Case Shiller Home Price Indices for September. The index actually uses three months of data — July, August, and September, in this case — and is released both with seasonally adjusted and not seasonally adjusted. The NSA data has been the focus in recent years, but the SA data gives a better sense of underlying trends beyond the usual seasonal ones (home prices, like sales, tend to decline in late fall and winter).
Today’s data also includes the quarterly update to the National Index in addition to the usual monthly updates for the 10- and 20-city composites.
Seasonally adjusted, the National Index stands at 127.78, down from 129.34 at the end of the second quarter and down from 133.03 a year ago. The National Index ticked up in the summer of 2010 with the expiration of homebuyer tax credits, but has now fallen to a level first reached in the 4th quarter of 2002. Not seasonally adjusted, the National Index is slightly above the lows of Q1 2011, but don’t put much stock in that; I keep thinking that soon Case Shiller will revert to focusing on the seasonally adjusted data.
The best news in the press release is that the rate of decline in most cities moderated in September, but prices were still lower in most places than in August.
The news was especially bad for Atlanta:
“Home prices drifted lower in September and the third quarter,” says David M. Blitzer, Chairman of the Index Committee at S&P Indices. “The National Index was down 3.9% versus the third quarter of 2010 and up only 0.1% from the previous quarter. Three cities posted new index lows in September 2011 – Atlanta, Las Vegas and Phoenix. Seventeen of the 20 cities and both Composites were down for the month. Over the last year home prices in most cities drifted lower. The plunging collapse of prices seen in 2007-2009 seems to be behind us. Any chance for a sustained recovery will probably need a stronger economy.
“Detroit and Washington DC posted positive annual rates of change and also saw an improvement in these rates compared to August. Only New York, Portland and Washington DC posted positive monthly returns versus August. It is a bit disturbing that we saw three cities post new crisis lows. For the prior three or four months, only Las Vegas was weakening each month. Now Atlanta and Phoenix have fallen to new lows too. On a monthly basis, Atlanta actually posted a record low rate of -5.9% in September over August. The markets are fairly thin, and the relative lack of closed transactions might be exacerbating the downside. The relative good news is that 14 cities saw improvements in their annual rates of change, versus the six that weakened.”
I have written often about how critical the health of the Atlanta metro area is to the state as a whole. It seems like a pretty obvious point, but the state’s leaders seem to have neglected that logic for years.
Here’s an updated graph from Calculated Risk using seasonally adjusted data: