Home Price Indices at Historic Lows

Only one metropolitan statistical area in the S&P/Case-Shiller Home Price Index posted a positive annual return for home prices in December. That honor goes to Detroit. The Motor City also had the lowest average home price in December at $68,000. The national average home price was $125,670.

Home prices around the country were at new index lows, according data released by Standard & Poors Indices.

According to the group, its S&P/Case-Shiller Home Price Index data through December 2011 showed that all three headline composites ended 2011 at new index lows.

The national composite fell by 3.8 percent during the fourth quarter of 2011 and was down 4 percent 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 percent and ?EUR??,,????'???4.0 percent versus December 2010, respectively. These numbers are worse than the -3.8% respective annual rates reported for November. With this latest data, S&P said all three composites are at their lowest levels since the housing crisis began in mid-2006.

In addition to both composites, 18 of the 20 Metropolitan Statistical Areas saw monthly declines in December over November. Miami and Phoenix were up 0.2 percent and 0.8 percent, respectively. At -12.8 percent, Atlanta continued to post the lowest annual return. Detroit was the only city to post a positive annual return, +0.5 percent in December versus the same month in 2010. In addition to the three composites, Atlanta, Las Vegas, Seattle and Tampa each saw average home prices hit new lows.

The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 4 percent decline in the fourth quarter of 2011 over the fourth quarter of 2010.

?EUR??,,????'??In terms of prices, the housing market ended 2011 on a very disappointing note,?EUR??,,????'?? David M. Blitzer, Chairman of the Index Committee at S&P Indices, said. ?EUR??,,????'??After a prior three years of accelerated decline, the past two years has been a story of a housing market that is bottoming out but has not yet stabilized.?EUR??,,????'??

Blitzer told Landscape Communications that causes of the on-going weakness in housing include: Access to mortgages, confidence about the economy, employment, and the inventory of foreclosed and unsold homes.?????EUR??,,?EUR

?EUR??,,????'??On mortgages, interest rates aren?EUR??,,????'???t the problem,?EUR??,,????'?? Blitzer said. ?EUR??,,????'??Qualifying for a mortgage is.?EUR??,,????'??
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Additionally, Blitzer noted that in a recovery, one of the last factors to turn up would be prices; sales, housing starts and consumer confidence will all come before sales.