| Even the Case-Shiller Indices Show Improvement |
| Written by Jonathan Smoke | |
| 08.26.2008 | |
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Discuss this article on the forums. (0 posts) The June Case-Shiller reading of existing home prices was released by Standard & Poor’s today. The year-over-year readings are still very negative with the National, 10-City and 20-City composites recording year-over-year quarterly declines of 15.4%, 17% and 15.9% respectively. But the June data showed signs of moderation in the rate of decline. And if you dig into them, there’s even more reason to see light at the end of the tunnel. David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s, reported: “Depending on where you focus on the details of the report, you can see some different stories on where home prices are headed. Record year-over-year declines were reported in both the 10-City and 20-City Composites in June; however, they are very close to the values reported for May. The rate of home price decline may be slowing. For the month, the 10-City Composite was down 0.6% and the 20-City Composite was down 0.5%. While still falling, these are far less than the 2-2.5% monthly drops seen earlier in 2008. In June, nine of the 20 cities were up month-to-month compared with seven in May. Nevertheless, not one market is showing a positive return over the past 12 months and seven of the metro areas are reporting declines in excess of 20.0%.”
The nine cities that were up in June were Atlanta, Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Minneapolis and New York. Seattle, Portland and Detroit were darn close to being up as well. In the way these indices are constructed, they provide the most negative view of home prices we can track. They selectively follow the most high profile big and former bubble markets. They also provide greater weight to more recent repeat sales, which in this market period means greater weight is given to foreclosure bank sales. But since the methods are consistent, the month-over-month trend is clear— the move in home prices as measured by the month-over-month change in the composite indices shows we are moving in the right direction. All of the non-bubble cities are showing even greater trends in that they aren’t just decelerating the decline. They are actually improving, and some have been improving each month for several months. 
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