Description of the Case Shiller Index

The S&P/Case Shiller Home Price Indices are published on the last Tuesday of each month with a two month time lag.  They are constructed to accurately track the price of single-family homes located in each metropolitan area.  The Indices have a base value of 100 in January 2000; thus, for example, a current index value of 150 translates to a 50% appreciation since January 2000 for a typical home in the local market.

The National Market

Updated data through January 2009, showed continued broad declines in the price of single-family homes in all of the 20 metro areas.  Average home prices across the US are at similar levels to what they were in the 3rd quarter of 2003.  The composite index of 20 metropolitan areas showed a decline of 2.8% from December 2008 to January 2009, an increase from the decline of 2.5% from November to December.  The composite year over year decline was 19.0%.

The weakest markets in terms of year over year declines are from the sunbelt.  Three markets, Phoenix, Las Vegas and San Francisco have given back 35.0%, 32.5% and 32.4% respectively of the value of homes since last January. The bad news just keeps coming.  Dallas and Denver were the strongest markets, showing declines of 4.9% and 5.1% from last year.

The NY Metro Market

The New York metropolitan area showed a decline of 1.2% in the period from December to January, an decrease from the 1.6% from November to December. The annual decline in the NY area measured 9.6%.

Opinion and Analysis

While there is much talk locally of how much prices have fallen, and they have fallen significantly, the decline in this area is generally less than one-half of the national rate of decline.  I anticipate that our local NY metro market will turn  upward before the nation as a whole, but our rate of increase will be less than some of those markets that have fallen so very hard.