Case-Shiller Levels Hopes for Price Rebound

A ""Standard & Poor's/Case-Shiller Home Price Index"":http://www.standardandpoors.com/home/en/us released Tuesday revealed slight bumps in home prices across composites collected for some 20 cities, with the nation's Capitol leading the way with an upward arc, even as existing-home sales flat-lined in June and single-family starts showed nominal signs of life.

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According to the index, 10- and 20-city composites jumped May over April by 1.1 percent and 1.0 percent, respectively, with only three in 20 assessments ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô namely, Detroit, Las Vegas, and Tampa ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô showing declines and Phoenix staying unchanged.

""We see some seasonal improvements with May's data,"" David M. Blitzer, S&P Indices index committee chairman, said in a ""statement"":http://www.standardandpoors.com/servlet/BlobServer?blobheadername3=MDT-Type&blobcol=urldocumentfile&blobtable=SPComSecureDocument&blobheadervalue2=inline%3B+filename%3Ddownload.pdf&blobheadername2=Content-Disposition&blobheadervalue1=application%2Fpdf&blobkey=id&blobheadername1=content-type&blobwhere=1245315652608&blobheadervalue3=abinary%3B+charset%3DUTF-8&blobnocache=true. ""This is a seasonal period of stronger demand for houses, so monthly price increases are to be expected and were seen in 16 of the 20 cities. The exceptions where prices fell were Detroit, Las Vegas and Tampa. However, 19 of 20 cities saw prices drop over the last 12 months. The concern is that much of the monthly gains are only seasonal.""

He said that ""May's report showed unusually large revisions across some of the MSAs. In particular, Detroit, New York, Tampa and Washington, D.C. _[sic]_ all saw above normal revisions.""

""Our sales pairs data indicate that these markets reported a lot more sales from prior months, which caused the revisions,"" he added. ""The lag in reporting home sales in these markets has increased over the past few months. Also, when sales volumes are relatively low, as is the case right now, revisions are more noticeable.""

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Blitzer went on to discuss composites faring ""poorly"" over the year. Of 20 MSAs, he said, all but one, plus two composites, came out with negative annual growth rates back in May. Dropping 3.6 percent, the 10-city composite fared better than its 20-city sibling, which posted declines to the tune of 4.5 percent in May in contrast with figures from the same month last year.

Of all the cities, Washington, D.C. ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô known for its attractive, high-turnover job market ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô upended the weaker, other data with gains in annual growth and monthly increases, which came out to 1.3 percent and 2.4 percent, respectively.

The index held that average home prices over May slumped to levels seen in 2003, yielding peak-to-current declines at -32.1 percent for 10-city composites and -32.3 percent for 20-city composites. Meanwhile, 10- and 20-city composite peak-to-trough rates fell to -33.5 percent and -33.3 percent, respectively.

""We might have a long way to go before we see a real recovery,"" he added. ""Sustained increases in home prices over several months and better annual results need to be seen before we can confirm real estate market recovery.""

A corresponding report from ""Capital Economics"":http://www.capitaleconomics.com/ offered up analysis about the trends.

""With 4.5 [million] homes still in the foreclosure pipeline, we think that prices may edge a little lower towards the end of the year,"" the report said. ""But even if prices don't fall further, a rapid and sustained rebound is unlikely when demand is being constrained by the high unemployment rate, lenders' rising down payment [sic] requirements and widespread negative equity.""

The report adds a hopeful note: ""After falling by 32% over the last five years, prices may have found floor.""

""Two consecutive months of month-over-month growth and continued relative strength in the non-distressed market segment are positive seasonal signs in the housing market,"" said Mark Fleming, chief economist at ""CoreLogic"":http://www.corelogic.com/, according to ""Global Economic Intersection"":http://econintersect.com/wordpress/?p=11219. ""Slowly declining shadow inventory and stabilized negative equity levels are also positive signs. Nonetheless, the fragile economic recovery is still critical to the long-term recovery in the housing market.""