Unless otherwise indicated, all data is from the June 26, 2012 Case-Shller Home Price index report
Today, the Case-Shiller home price index for the Detroit market sits at 65.26. The indices are constructed such that January 1, 2000 is equal to 100. So today’s home prices in Detroit are about 35% under where they were 12 years ago.
Officially the decline started in the spring of 2006, about the same time as price started to fall nationally. However, Detroit really only grew during the first part the 2000’s due to national inertia. At the peak, the index value for Detroit just reached 127 (27% increase since 1/1/2000) while Tampa hit 238 and Miami 280. Even the 20 market national composite more than doubled at its peak, hitting 206.
In any event, for the month of April (released June 26th), if not for Detroit, each of the markets followed by Case-Shiller would have increased during the month. Detroit was the lone exception where prices actually managed to fall 3.6% (since it all happened in one month, I think you call it a plunge). This is only the 4th time since the spring of 2006 (beginning of the crash) that at least 19 of the 20 markets followed by Case-Shiller gained ground. Conversely, during the boom, this happened for months in a row on several occasions. In fact, all markets gained in 4 of 12 months during 2004 and 5 of 12 months during 2005. So, this is a fairly big deal, as our Vice President might say if he were appropriately censored.
Both Florida markets did very well with Tampa up 1.9% for the month which swung the entire year from negative territory to up.8%. Miami was up .4% which brought the 12 month gain to 3.2%. Both national composite indices were up 1.3% on the month but both down on the year around 2%. Case-Shiller doesn’t have Sarasota/Manatee index nor is Sarasota/Manatee included in the Tampa market. But given the vacation nature of our market I would bet that we more closely emulate the Miami results than Tampa. Even if we are somewhere in between, we are up for the year. In fact, Core Logic Home Price Indices, a competing index, has the State of Florida up 5.5% since last April (included distressed sales) and up 2.9% excluding distressed sales.
Scott Norris is a full-time Broker Associate with the perennial sales-award-winning Coldwell Banker office in Longboat Key, Florida. He has been a resident of the area since 1971 and a real estate professional since 2002. For questions about any of these posts or buying or selling property in the area, Scott can be reached on his direct line at 941-545-8706 or by email at Scott@ScottNorris.com. Connect with Scott on LinkedIn at http://www.linkedin.com/in/jscottnorris. Visit his website at www.ScottNorris.com to simplify your search for Sarasota and Bradenton Homes with no registration required.
The Case-Shiller Home Price Indices for March 2012 were released yesterday. Both the 10 and 20 market national composite indices were essentially flat on the month and down 2.8% and 2.6%, respectively, compared to March 2011. Both Florida markets followed by Case-Shiller bucked this trend with Miami gaining .9% during the month of March and Tampa picking up 1.3%. Compared to March of 2011 Maimi is actually up 2.5% while Tampa has recovered to only a 1% decline.
For the Miami market, the March gain represents the 4th month of consecutive positive changes in the index and 6 consecutive months of improvements. For the Tampa market, this month’s gain was a whipsaw ending a string of 7 consecutive months of decreasing prices. In February the Tampa index dropped .2% and in January it dropped .8%. Given that the index is calculated using a 3 month rolling average, the results in March alone, must have been huge. Look for the index to stay positive for at least another 2 months – probably enough to wipe out all losses on the year.
There were distinct, though inexplicable, trends across the other markets. Every market on the Pacific Coast was up for the month except Portland OR (-.5%). However, all of these markets remain solidly in the red compared to March 2011 with LA the worst at -4.8%
With the exception of Las Vegas, every market in the West (excluding the Pacific Coast markets previously discussed) and Southwest were very strong. Every market was up for the month except Las Vegas which was flat. Compared to March 2011, every market was up except Las Vegas which is down 7.5%. For the past 12 months, Phoenix is the strongest market not only the West but the entire country at +6.1%.
The Midwest (which supplies us with many buyers) was uniformly down in March, with Detroit showing the way down at -4.4% followed by Chicago at -2.4%. Over the past 12 months the results were more mixed with Chicago and Cleveland down (-7.1% and -2.4%, respectively) and Detroit and Minneapolis both up (2.3% and 3.3%, respectively).
The South all looks good except Atlanta. I have already discussed the Florida markets. Charlotte was up 1.2% on the month and now +.4% since last March. Atlanta, however, is currently the worst performing market in the country with prices falling 17.7% since March 2011. This is more than 10 percentage points worse than the next two closes competitors of Las Vegas at down 7.5% and Chicago at 7.1%.
There are four markets where the raw index is below 100. This means that in those markets prices are under those recorded in January 2000 when the index is set to be 100. The difference between the current index and 100 represents the % appreciation or depreciation since January 2000. So an index of 66 means that current day prices are 34% less than those on January 2000.
Finally, five markets hit new, post crisis lows, more or less one from each corner of the country – Atlanta in the South, Chicago in the Midwest, Las Vegas in the Southwest, Portland OR in the West, and New York in the Northeast. I don’t see any real trends here other than Atlanta, Chicago, and New York represent 3 of the 4 largest hubs for travel in the country (which probably also means they are the largest business centers in the country), with LA being the fourth. LA only missed making a new low by an eyelash. The LA index stands at 159.73 while the post crisis low is 159.18 set in May 2009.
The April Case-Shiller release shows that home prices in the Miami market increased .6% during the month of February and .8% for the 12 months ended in February 2012. This was the third consecutive month of increases in the Miami market.
The Tampa index hit a new post-crash low during February with prices dropping .2% during the month of February and 2.9% for the 12 months ended February 2012. The Tampa index has lost ground for the past 7 months in a row.
Both Florida markets performed better than the national indices. The 20 market index dropped .8% for the month and is now down 3.5% for the past 12 months.
The worst performing market was Atlanta at down 2.9% on the month and a staggering 17.3% over the past 12 months. Atlanta is now chasing Detroit for the lowest index. The Atlanta CS index stands at 83.3(home prices are 16.7% less than prices at January 1, 2000) while the Detroit index stands at 68.8.
The Phoenix market showed the largest increase at up 1.2% for the month and up 3.3% for the past 12 months.
The December 2011 Case-Shiller results were released last week (February 28, 2012). The indices revealed a 1.1% decline nationally from November and a 4.0% decline since the previous December. The Tampa market fell .2% between November and December, hitting a new cycle low. From last December, the Tampa index has fallen 4.3%. The Miami market registered a .2% increase from November to December and a 3.8% decrease from December 2010 to December 2011. Measured from their peaks in 2006, the Tampa and Miami market are now off 51% and 53%, respectively. The 20 market national composite index is just 34% off its peak. The current indices for Tampa and Miami are back to summer 2002 levels while the 20 market national composite is back to February 2003.
In the press release, S&P noted that Las Vega, Seattle, and Atlanta joined Tampa in hitting new post crash lows during December. In addition to Miami, Phoenix was the only other market to increase from November to December.
The October Case-Shiller numbers released last week for October 2011 were down from September in 19 of the 20 covered in the report. Only Phoenix showed an increase (up .3%). Tampa and Miami were down .5% and 1.2%, respectively. The 10 and 20 market national composite indices were down 1.1% and 1.2%.
Since last October of last year, every market is lower except Washington DC and Detroit. The DC market is up 1.3% since last October while Detroit is up 2.5%. I would say that the upswing in Detroit is because the only direction the index can move is up, however, it managed to drop 3.5% from September. If this trend continues, Detroit will be negative on the year. The current index for Detroit is now at 71.0 which means that today's home prices in Detroit are 29% lower than they were on January 1, 2000. After eleven years, home prices are down 29%.
The biggest and only double digit loser for the past year is Atlanta at down 11.7%. Atlanta shares the stage with Detroit in being the only two markets where prices are under January 1, 2000. Atlanta's index is 91, indicating that home prices have declined 9% over the past 11 years. The Tampa and Miami markets are down 6.1% and 4.0% since last October. The 10 and 20 market national composite indices are down 3.0% and 3.4% on the year.
The Standard and Poors Case Shiller indices measure the change in home prices across 20 markets. The indices are computed monthly with a 2 month lag (October indices are released in December). The indices are computed such that prices on January 1, 2000 equal 100. The percentage change between any two points in time can be measured by dividing change in the index by the index in the earlier period. For example, if the index for this month is 110 and the index for this month last year was 100, then home prices have increased 10%, at least as measured by the index. You can read more at Standard And Poors website.
Choppy is what best describes the past year of the Case-Shiller Home Price Indices. Since peaking in August 2006, the 20 market National Composite index declined for 33 months in a row. That’s represents a decline in home prices every month between August 2006 and April 2009. During this period the index declined from a value of 206 to 139 or about 33%. The indices for Tampa and Miami declined about 41% and 48%, respectively, during this same period.
source is S&P Case-Shiller Home Price Indices for September 2011 (released in November 2011)
Since April 2009, the 20 market national composite index has bounced around moving up for 3 or 4 months then down for 3 or 4 months. Currently the national composite index stands 2% higher than April 2009. So the general trend through all of the choppiness over the past 2 and half years has been up. The Florida indices have continued to decline during the past 2 and half years. Since April 2009, Tampa and Miami are down 10% and 5% respectively. However, most of this decline happened early on in the period. For 2011, both Florida indices are down only about 1%.
This choppiness is more or less what you would expect at some turning point in the market. Either they market is taking a breather before going lower or the period of price declines is about to be over. I think the foreclosure story will be the deciding factor here and may be what is contributing to the price fluctuations. Read my post on Distressed Property here to get more details.
The October Case-Shiller report released the last week of October (August results) shows prices rising from July by .3% in both the 10 and 20 market national composite indices. The indices are still down year over year 3.5% and 3.8% respectively.
The Tampa and Miami markets were down slightly for the month at -.1% and -.3% respectively and leaving them at -5.8% and -4.6% compared to August 2010.
The chart below shows index information by market. Notice that nationally (using the broader 20 market composite index) the price index peaked in July 2006 at just above 206. This implies that prices slightly more than doubled in the six and a half years between January 2000 (when the index was 100) and July 2006. This same index has since given up 30.8% and now sits at 142.8 (or 42.8% above the January 2000 level).
If you look at the market information in the chart above you will see that a couple of markets have really been beaten back since the peak with declines over 55%, namely Phoenix and Las Vegas. Both of these would seem to be somewhat of a surprise as prices weren’t particularly over extended (relative to the national average) yet the current price level came crashing back to the year 2000 or earlier.
Another interesting group is the California markets (LA, San Diego, and San Francisco). All three of these hit peaks higher than the national average (LA and San Diego much higher), yet their current indices are all above the national average (with LA and San Diego being considerably higher). California has a state debt of over 612 billion (StateBudgetSolutions.org ). If California were a country they would be number 12 on the countries with the highest debt levels, somewhere between Mexico and Spain (CIA World Fact Book). They account for some 15% of the $4 trillion in total US state debt. They also have among the highest income tax rates in the country. Their 9.4% personal income tax rate is the highest as is their 8.25% sales tax rate. Their corporate rate of 8.84% is the 6th highest. Every time you pick up the paper some big company is threatening to leave the state. Yet they seemingly have an above average residential real estate market. Go figure.
Finally, look at the turtles in this group – Dallas and Denver. Their home prices never really shot up at all. At their peaks, the indexes for Dallas and Denver were 126 and 140, respectively. Or home prices went up only 26% and 40% over a 6-7 year period. Now they are down only 7.3% and 9.8% from their highs. On average, no matter when you bought or refinanced there, as long as you did so with 10% equity you are still above water. That seems almost foreign.
July was another good month for home prices with Phoenix and Las Vegas being the only 2 markets that moved backwards (down .1% and .2%, respectively). The 20 market national composite was up .9%. Tampa and Miami were up .8% and 1.2%, respectively.
On the year, the 2 biggest gainers have been Atlanta (up 4.5%) and Detroit (up 5.8%). I guess if the Lions can go 4-0 for the first time in 30 years anything can happen in Detroit.
There doesn’t seem to be any real pattern to the year-to-date results. Most of the Sunbelt areas are down as is the Northwest. The East Coast is generally up and the Mid West is mixed.
The Tampa and Miami indices started moving up in the Fall of 2009 hitting a post bust high of 140 and 149, respectively. If we can get back above those numbers (Current indices are 130 and 141), then we will officially be on the move up again.
To read the report and see the raw numbers, visit the Case/Shiller section of the Standard and Poors sight here. In the press release accompanying the report, S&P makes makes its first mention in 3 months of the declining default rates in its own Experian Consumer Credit Default Indices. This index, published by S&P has been screaming a slow down in mortgage defaults for the past 2 years (see my foreclosure update this month). Even with the mention this month they fail to point out that the first mortgage default rate is now back to the same level as August 2007 while the second mortgage default rate is all the way back to July 2006.
By the way, these are defaults as reported to a credit reporting agency, not foreclosure filings. These rates shouldn't have anything to do with the foreclosure paperwork slow down. It is simply that fewer people are missing mortgage payments. This has got to mean we are close to the end (assuming no other national or global financial catastrophe) of the foreclosure cycle, just as the waning supply of foreclosure inventory would indicate.
I'll write more on this later but for now, good news. Every single market tracked by Case-Shiller showed an increase in their index over last month. Both the 20 market and 10 market composite indices were up 1.1%. Tampa was up 1.3% which erased most of the losses incurred in 2011 up to this point. Miami was up .6%.
Even lowly Detroit managed to move ahead for the first time in nearlly a generation, gaining 2.2% which put its prices back to where the were about 30 minutes ago. Actually it moved them back to where they were in March 2011.The index for Detroit is now at 65.42 or 65% of the 2000 price level. The last time the index was at this low (except for the months of April and May of this year) was May 1994.
Not only did Detroit perform well but, every market in the Midwest made out well. Minneapolis and Chicago were both up 3.2%, Cleveland up 1.5%.
If there was a slow area, it was the West and Northwest. Phoenix and La were both up just .3%, San Diego up .2%, San Francisco up .4%, Las Vegas up .1% Portland was just over flat, and Seattle was up .7%. The only big hitter in the West was Denver up 1.7%.
You can read the S&P's press release and analysis here.
The Case-Shiller Home Price Indices for April were released yesterday. The indices increased in most markets along with the 10 market and 20 market composite indices. Tampa and Miami, the only two Florida markets tracked by Case-Shiller were 2 of the 7 markets that decreased from March (with 13 markets showing increases). The Tampa market was down .4% from March and is now 7.7% down from last year. Miami was down .2% in April and is down 5.6% from this time last year. Prices in both markets are roughly back to the summer of 2002.
Other, non-Florida markets declining during April were Boston, Charlotte, Chicago, Detroit (down 2.9% for the month alone), and Las Vegas. The biggest gainer was Washington DC ( up 3% for the month-your tax dollars are having an effect). DC is also the only market to have a year-over-year increase (up 4% over this time last year). The worst performing market in the past 12 months has been Minneapolis (down 11.1%).
The index values for Las Vegas, Cleveland, and Detroit are currently 97.69, 96.47, and 62.74. This means that all three of these markets have completely given up all gains made since January 2000. Prices in Detroit are less than 2/3 of their January 2000 level.
As with last month, there are statements in the analysis that accompanies the release of the indices that may make you think that our market is different than the rest of the country. For example, the analyst states that “Existing home sales rose in May, but are still 15% below last year’s pace and about 35% below their 2005 pace”. That’s clearly not the case in Sarasota and not exactly true in Manatee County. Sarasota single family home sales in 2011 are actually .3% AHEAD of the 2010 pace of 5,991 home sales. This will put them just 7% behind 2005 and nowhere near the lows which occurred in 2007 when just 3,921 homes sold.
In Manatee County, sales this year are 9% AHEAD of the 2010 pace. In 2010, a total of 3,966 homes sold in Manatee County. If the current trend continues, then 2011 should see nearly 4,400 home sales. Manatee home sales in 2005 were 5,697. So even with the 4,400 potential sales this year, 2011 will still be 23% below 2005. However, we will never get to 2005 levels this year simply because we don’t have enough inventory to do so. Still is should be well above the floor in 2008 when just 3,363 homes sold.
Another quote in the analysis is that “Single family housing starts were up in May but still well below their 2010 levels and still very close to their 30 year lows. Well, read
this about Lakewood Ranch. Lakewood Ranch has to account for the lion’s share of new construction activity in Manatee County if not both counties combined. According to the article, in 2011 420 new homes are predicted to sell which will be the best year for new construction sales since 2006 (when 650 homes sold). While 440 homes is still about 1/3 under the 2006 levels and 46% under the all time high of 750 sales that occurred in 2004, it is nowhere near the floor that occurred in 2009 when just 120 new homes sold.