Home Prices Still Improving but at a Moderating Pace Entering the Fourth Quarter of 2009 According to the S&P/Case-Shiller Home Price Indices

Data through October 2009, released today by Standard & Poor's for its S&P/Case-Shiller (1) Home Price Indices, the leading measure of U.S. home prices, show that the annual rate of decline of the 10-City and 20-City Composites improved compared to last month's reading. This marks approximately nine months of improved readings in these statistics, beginning in early 2009.

The annual returns of the 10-City and 20-City Composite Home Price Indices, declining 6.4% and 7.3%, respectively, in October compared to the same month last year. All 20 metro areas and both Composites showed an improvement in the annual rates of decline with October's readings compared to September.

"The turn-around in home prices seen in the Spring and Summer has faded with only seven of the 20 cities seeing month-to-month gains, although all 20 continue to show improvements on a year-over-year basis. All in all, this report should be described as flat," says David M. Blitzer, Chairman of the Index Committee at Standard & Poor's. "Coming after a series of solid gains, these data are likely to spark worries that home prices are about to take a second dip. Before jumping to conclusions, recognize that the one time that happened at the beginning of the 1980s, Fed policy saw dramatic reversals, which is very different from the stable and consistent Fed policy we have today. Further, sales of existing homes - those included in the S&P/Case-Shiller Home Price Indices - have been very strong in recent months, working off the inventories of houses for sale. At the same time, housing starts remain weak, fears that the market will be swamped by a wave of foreclosures are heard and government programs aimed at the housing market will expire in the first half of 2010."

The index levels for the 10-City and 20-City Composite Indices. As of October 2009, average home prices across the United States are at similar levels to where they were in the autumn of 2003. From the peak in the second quarter of 2006 through the trough in April 2009, the 10-City Composite is down 33.5% and the 20-City Composite is down 32.6%. With the relative improvement of the past few months, the peak-to-date figures through October 2009 are -29.8% and -29.0%, respectively.

San Francisco has reported seven consecutive months of positive returns, San Diego has reported six and Los Angeles and Phoenix are close behind with five. While the two Composites were flat, seven of the MSAs reported positive monthly returns for October and two of those -- Phoenix and San Francisco -- were greater than +1.0%. Looking at the annual statistics, both Minneapolis and Portland are no longer reporting double-digit declines. Denver and Dallas are nearing positive territory with their annual figures at -0.1% and -0.6%, respectively.

Las Vegas remains the one market that has not seen a glimmer of hope so far this year. Prices have declined for 38 consecutive months, with a peak-to-trough reading of -55.4%. It is now barely 5% above its January 2000 level. This compares to its peak in August 2006, when the average home price was 135% above that same level.

The table below summarizes the results for October 2009. The S&P/Case-Shiller Home Price Indices are revised for the 24 prior months, based on the receipt of additional source data.

October/ September/
October 2009 September August
Metropolitan 1-Year Change
Area Level Change (%) Change (%) (%)
------------ ----- ---------- ---------- -------------
Atlanta 110.12 -1.0% 0.0% -8.1%
Boston 154.70 -0.6% -0.2% -2.8%
Charlotte 119.05 -0.7% -0.7% -7.0%
Chicago 130.78 -1.0% 1.2% -10.1%
Cleveland 104.97 -0.7% -1.6% -3.5%
Dallas 119.90 -0.6% -0.7% -0.6%
Denver 128.91 -0.4% -0.5% -0.1%
Detroit 73.07 0.2% 1.8% -15.1%
Las Vegas 104.70 -0.1% -0.9% -26.6%
Los Angeles 168.43 0.3% 0.8% -6.3%
Miami 149.09 -0.4% 0.5% -14.0%
Minneapolis 124.51 -0.5% 1.9% -8.4%
New York 175.01 0.0% -0.1% -7.7%
Phoenix 110.71 1.3% 0.8% -18.1%
Portland 149.88 0.1% -0.5% -9.9%
San Diego 155.37 0.4% 0.9% -2.4%
San Francisco 135.81 1.2% 1.3% -2.6%
Seattle 149.26 0.2% -0.4% -12.4%
Tampa 140.27 -1.6% -0.6% -15.2%
Washington 179.71 -0.4% 0.5% -2.8%
Composite-10 158.82 0.0% 0.5% -6.4%
Composite-20 146.58 0.0% 0.4% -7.3%
------------ ------ --- --- ----
Source: Standard & Poor's and Fiserv
Data through October 2009

Since its launch in early 2006, the S&P/Case-Shiller Home Price Indices have published, and the markets have followed and reported on, the non-seasonally adjusted data set used in the headline indices. For analytical purposes, Standard & Poor's does publish a seasonally adjusted data set covered in the headline indices, as well as for the 17 of 20 markets with tiered price indices and the five condo markets that are tracked. A summary of the monthly changes using the seasonally adjusted (SA) and non-seasonally adjusted (NSA) data can be found in the table below.

A summary of the monthly changes using the seasonally adjusted (SA) and non-seasonally adjusted (NSA) data can be found in the table below.

October/September Change (%) September/August Change (%)
Metropolitan
Area NSA SA NSA SA
------------ --- --- --- ---
Atlanta -1.0% -0.2% 0.0% 0.1%
Boston -0.6% -0.2% -0.2% -0.5%
Charlotte -0.7% 0.1% -0.7% -0.3%
Chicago -1.0% -1.0% 1.2% 1.2%
Cleveland -0.7% -0.4% -1.6% -1.0%
Dallas -0.6% 0.0% -0.7% -0.3%
Denver -0.4% 0.3% -0.5% 0.1%
Detroit 0.2% 1.2% 1.8% 1.1%
Las Vegas -0.1% -0.3% -0.9% -1.1%
Los Angeles 0.3% 0.7% 0.8% 0.7%
Miami -0.4% -0.5% 0.5% 0.6%
Minneapolis -0.5% 0.2% 1.9% 1.2%
New York 0.0% -0.2% -0.1% -0.1%
Phoenix 1.3% 1.0% 0.8% 1.0%
Portland 0.1% 0.3% -0.5% -0.5%
San Diego 0.4% 1.1% 0.9% 1.0%
San Francisco 1.2% 1.7% 1.3% 1.6%
Seattle 0.2% 0.4% -0.4% -0.2%
Tampa -1.6% -1.2% -0.6% -1.1%
Washington -0.4% 0.2% 0.5% 0.6%
Composite-10 0.0% 0.4% 0.5% 0.3%
Composite-20 0.0% 0.4% 0.4% 0.2%
------------ --- --- --- ---
Source: Standard & Poor's and Fiserv
Data through October 2009

The S&P/Case-Shiller Home Price Indices are published on the last Tuesday of each month at 9:00 am ET. They are constructed to accurately track the price path of typical single-family homes located in each metropolitan area provided. Each index combines matched price pairs for thousands of individual houses from the available universe of arms-length sales data. The S&P/Case-Shiller National U.S. Home Price Index tracks the value of single-family housing within the United States. The index is a composite of single-family home price indices for the nine U.S. Census divisions and is calculated quarterly. The S&P/Case-Shiller Composite of 10 Home Price Index is a value-weighted average of the 10 original metro area indices. The S&P/Case-Shiller Composite of 20 Home Price Index is a value-weighted average of the 20 metro area indices. The indices have a base value of 100 in January 2000; thus, for example, a current index value of 150 translates to a 50% appreciation rate since January 2000 for a typical home located within the subject market.

These indices are generated and published under agreements between Standard & Poor's and Fiserv, Inc. The S&P/Case-Shiller Home Price Indices are produced by Fiserv, Inc. In addition to the S&P/Case-Shiller Home Price Indices, Fiserv also offers home price index sets covering thousands of zip codes, counties, metro areas, and state markets. The indices, published by Standard & Poor's, represent just a small subset of the broader data available through Fiserv.

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