A few notes regarding the Standard & Poors/Case-Shiller indices:
- There are actually three different indices: a 10-city composite, a 20-city composite, and a national index updated quarterly while the other two are update monthly.
- Each month’s data is actually a composite of the three previous months.
- There’s a significant lag, so today’s release is for December 2011 and includes data from October, November, and December.
- Case-Shiller releases both the seasonally adjusted and the not seasonally adjusted data. Case-Shiller headlines the unadjusted data, but home prices show clear if small seasonal trends.
- The data in this post was released this morning, but there’s less and less coverage — a couple of years ago, home price declines were treated as big news, but now some further bleeding seems to be built into expectations of economists and consumers alike.
From the press release:
Data through December 2011, released today by S&P Indices for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, showed that all three headline composites ended 2011 at new index lows. The national composite fell by 3.8% during the fourth quarter of 2011 and was down 4.0% versus the fourth quarter of 2010. Both the 10- and 20-City Composites fell by 1.1`% in December over November, and posted annual returns of -3.9% and -4.0% versus December 2010, respectively. These are worse than the -3.8% respective annual rates both reported for November. With these latest data, all three composites are at their lowest levels since the housing crisis began in mid-2006.
From the press release, showing the year-over-year percentage change. The short stretch of year-over-year gains was directly related to the homebuyer tax credits:
With a 12.8% yearly decline, Atlanta is faring far, far worse than any other metro area among the 20 that make up the index.
All the more absurd, then, that Georgia did such a poor job negotiating in the settlement with five major mortgage servicers.
From the AJC’s Atlanta home prices hit 14-year low:
Thousands of foreclosures and short sales have battered metro Atlanta’s housing market in recent years. The region’s index at 87.30 in December marked its lowest point since the end of 1997 and was the second-lowest of 20 metros, with only Detroit lower at 68.39. Its peak was 136.47 in mid-2007.
So the year-end momentum was negative, and it would be a mistake to expect any sudden rebound in the first couple of months of the year.
But I expect the majority of those 20 metro areas to show slightly improving or at least stagnant numbers at the end of 2012 compared to 2011. Will that be the case for Atlanta?
I think at this point, we’d all be happy to see Atlanta home prices, which are incredibly cheap at this point by some key fundamental measures, simply level off.