Data through April 2012, released today by S&P Indices for its S&P/CaseShiller Home Price Indices, the leading measure of U.S. home prices, showed that on average home prices increased 1.3% in the month of April for both the 10- and 20-City Composites. This comes after seven consecutive months of falling home prices as measured by both indices.
April’s data indicate that on an annual basis home prices fell by 2.2% for the 10-City Composite and by 1.9% for the 20-City Composites, versus April 2011. While still negative, this is an improvement over the annual rates of -2.9% and -2.6% recorded for the month of March 2012. Both Composites and 18 of the 20 MSAs saw increases in annual returns in April compared to those published for March; only Detroit and New York fared worse in April, posting annual returns of +1.2% and -3.8% respectively, falling below their March returns of +3.9% and -3.0%. For the seventh consecutive month, Atlanta posted the only doubledigit negative annual return at -17.0%, its 22nd consecutive month of negative annual returns. Ten of the 20 MSAs saw positive annual returns – Boston, Charlotte, Dallas, Denver, Detroit, Miami, Minneapolis, Phoenix, Tampa and Washington D.C. No cities posted new lows in April 2012.
We are a long way from a “normal” housing market, whatever that will look like post-recovery, but the widespread price stabilization is good news for a variety of reasons:
- panicking sellers fearful of further declines might be less likely to list their houses, thus decreasing inventory
- buyers waiting for or hoping for another tumble in prices might now be more likely to make offers, thus decreasing inventory
- stabilizing prices also means stabilization in net worth for many households in the country, which should spur other spending and investment
- this data is for April and Case-Shiller covers a 3-month period, so there are sales in this mix that would have gone under contract around the first of the year
- it’s likely that the data has only improved in the months since, and Case-Shiller could be positive year-over-year sometime this fall
- this data is not adjusted for seasonality, so there’s the potential for considerably weaker conditions this fall and winter
- the housing recovery is wildly uneven at this point, just as the bust was a few years ago
A few graphs from the S&P press release this morning: