I was awakened from my long winter nap by the predictable sensational reporting of the latest Case-Shiller home price indices.
New York, December 28, 2010 â€“ Data through October 2010, released today by Standard & Poorâ€™s for
Home Price Indices, the leading measure of U.S. home prices, show a deceleration
in the annual growth rates in 18 of the 20 MSAs and the 10- and 20-City Composites in October
compared to what was reported for September 2010. The 10-City Composite was up only 0.2% and the
20-City Composite fell 0.8% from their levels in October 2009. Home prices decreased in all 20 MSAs
and both Composites in October from their September levels. In October, only the 10-City Composite
and four MSAs â€“ Los Angeles, San Diego, San Francisco and Washington DC â€“ showed year-over-year
gains. While the composite housing prices are still above their spring 2009 lows, six markets â€“ Atlanta,
Charlotte, Miami, Portland (OR), Seattle and Tampa â€“ hit their lowest levels since home prices started to
Fall in 2006 and 2007, meaning that average home prices in those markets have fallen beyond the recent
lows seen in most other markets in the spring of 2009.
The index showed a decline in the Bay Area from October to Septemberâ€™s numbers but a year-over-year increase for the same period.
What does this mean? It means that compared to last year home values are up in the San Francisco MSA (metropolitan statistical area) which includes San Francisco down to Redwood City. It also means that the values dropped from September to October. How much? 1.9% to be exact. Not what I would call earth shattering and I certainly wouldnâ€™t describe it as one of our local TV stations did as â€œBay Area Prices Plummetâ€.
Later in the evening a competing station had the headline â€œBay Area Prices upâ€, referring to the year over year statistic.
Neither news headline tells the whole story.
The much ballyhooed double dip in fact did occur but it was much more pronounced in other parts of the country and more akin to a glitch than a dipâ€”and likely it was caused by the cessation of government subsidies which helped to prop up home values in 2009.
The information contained in this newsletter is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.