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Case-Shiller Indices Up in September, Momentum Slows

Despite another month of home price improvement, the housing sector faltered in September as prices fell five of the 20 cities in the monthly Case Shiller Home Price Index, Standard & Poor’s reported Tuesday.

The month-month September gain was weaker than in August when prices rose in all cities surveyed

The 10-city index increased 0.3 percent from August to 158.93, its highest level since September 2010, the 20-city index rose by the same 0.3 percent to 146.22, also the highest in two years and the national index improved 2.2 percent in the third quarter to135.67 its highest level since 3Q 2010.

Economists had expected a slightly faster, 0.4 percent, month-month improvement.

Prices had increased in 19 of the 20 cities in July and August and in all 20 cities in May and June. The quarterly report on prices nationally also showed a deceleration: the 2.2 percent 3Q gain was down sharply from the 7.1 percent jump in the second quarter.

The 10-city index showed a 2.1 percent year-year gain and the 20-city index was up 3.0 percent from September 2011, according to Case Shiller.

According to the National Association of Realtors, the median price of an existing single family dropped 3.6 percent in September, but was up 7.9 percent from September 2011.

The improvement in the Case Shiller indices – both the 10- and 20-city have risen month-month for the last six months – has been increasingly weaker. In the preceding five months, the improvement in the 10-city index averaged 2.4 percent and in the 20-city index averaged 2.3 percent.

Prices dropped in September in five cities led by 0.9 percent decline in Cleveland, 0.6 percent decline in each of Boston and Chicago, a 0.3 percent drop in Charlotte, NC and a 0.1 percent dip in New York. All of those cities showed price gains August. (Pinning them to an electoral map, only Cleveland is in a “swing state,” Ohio, which was carried by President Obama.

The cities in which prices improved month-month were led by Las Vegas and San Diego, each of which showed a 1.4 percent gain. Prices in Las Vegas had improved 1.6 percent in August and in San Diego 0.9 percent, Prices rose 1.1 percent in September in Phoenix and Minneapolis compared with 1.8 percent and 1.2 percent increases, respectively, in August.

Year over year prices improved in 18 of the 20 cities in September, compared with year-year gains in 17 of the 20 cities in August.

Prices were down year-year in September in New York, 2.3 percent matching the 12-month drop registered in August, and down 1.5 percent in Chicago which had shown a 2.6 percent month-month drop in August.

Year-year price gains were led by Phoenix, 20.4 percent, Minneapolis, 8.8 percent, Detroit 7.6 percent San Francisco, 7.5 percent, and 7.4 percent, Minneapolis.

Even with the increases, the 10-year index remains down 29.8 percent from its June 2006 peak and the 20-year index is down 29.2 percent from its July 2006 peak.