Elain Szu's Blog

Once again, the release of the Case Shiller Index for home prices has the real estate industry (and economists) in a tizzle - but not everyone's in agreement about the message this time.

While year-over-year numbers indicate the index is down a massive 18.1%, the most recent monthly drop for April is smaller than previous declines at 0.6% (as compared to the 2.2% we analyzed last month).

Is it the beginning of the "the turnaround" or just a faux? 
S&P chairman David Blitzer kept his insights fairly neutral: "Thirteen of the 20 metro areas also saw improvement in their annual return compared to that of March. Furthermore, every metro area, except for Charlotte, recorded an improvement in monthly returns over March," Blitzer said in a statement. "While one month's data cannot determine if a turnaround has begun; it seems that some stabilization may be appearing in some of the regions."

But it sounds like not everyone's so convinced.  Some notable "quotables" from the media:

• CNNMoney.com: "Not all optimistic: The housing market picture is still very murky, according to Pat Newport, a real estate analyst with IHS Global Insight. He's not convinced that the improved April report means much more than a seasonal variation in housing markets. Spring is, historically, a strong time of year for housing markets."
• MarketWatch.com: "U.S. home prices fell in April, but overall annual declines are slowing, according to the national Case-Shiller home price index released Tuesday... 'The fly in the ointment is foreclosures, which tend to result in much lower prices and are an increasing proportion of transactions,' [Ian] Shepherdson [chief U.S. economist with High Frequency Economics] wrote. 'For now, though, this is clearly less bad than recently.'"
• Wall Street Journal Blogs: "...the bloodletting may not be over. Here’s why: If price declines accelerate for the mid-to-upper end of the housing market, then that could generate enough large declines in values—even among a small segment of the overall housing market—to push the index lower still.
• Bloomberg.com: "Home prices saw a “striking improvement in the rate of decline” in April and trading in funds launched today indicates investors believe the U.S. housing slump is nearing a bottom, said Yale University economist Robert Shiller."

And I thought numbers didn't lie.  Home buyers, owners and sellers: What do you think?  Do you see a turnaround or more trouble for your area?

Since we last wrote about the Case Shiller Index, home prices have continued to drop at a steady pace according to the S&P/Case Shiller Home Price Index released earlier Tuesday.  The National Home Price Index recorded a record annual decline of 19.1%, putting home prices at late 2002 levels.  The overall prognosis from the Index Committee’s Chairman, David M. Blitzer, was unsurprisingly dim: “We see no evidence that a recovery in home prices has begun”. 

The one sliver of silver lining: The 10- and 20-city Composites did NOT post a record annual drop for the second time since October 2007.  That said, they ain’t faring so well either.  Leading the pack of record annual declines are Phoenix, Las Vegas and San Francisco - each with an annual drop of greater than a 30%.  

Will it get better?  Or are these markets still “over-priced”?  Everything - including the number of price slashed homes on Trulia - seems to indicate the latter.  Below are the number of price reductions on current listings to give you an idea of just how much sellers are dropping prices (and still not selling):

Source: Proprietary Trulia analysis from May 26, 2009

What’s the punchline?  For those expecting a near turnaround on home prices, don’t hold your breath.  But, this could actually be great news for the savvy buyer - especially if you know how to search by price reductions on Trulia.  Here are three amazing deals in the hardest hit cities that made me think twice about investing my pennies in the stock market:

#1) Las Vegas, NV area: 3,975 listings with price reductions

$280,000 (over a 100K reduction from June 2008)
5 br | 4 ba | 3,546 sqft | Single-Family Home

#2) Phoenix, AZ area: 6,525 listings with price reductions

$65,990 (Sold in 2003 for $137,785)
3 br | 2 ½ ba | 1,616 sqft | Single-Family Home

#3) San Francisco area: 1,186 listings with price reductions

$550,000 (after a 15% reduction only two weeks prior)
2 br | 1 ba | Apt/Condo/Twnhm

Home prices plunged at record rates in December and consumer confidence is at all time low, according to the S&P/Case Shiller home price index released today.  The question is will today's falling house prices, the recent mortgage relief plan and the $8,000 tax credit for first time home buyers be enough to jump start worried consumers?

The Case Shiller 20 city index of home prices dropped 18.5 percent from December 2007 prices and 19.2 percent for the 10 city index for the same period.   But perhaps the source of most concern is the rate at which single-family home prices are dropping - the biggest drop since Case Shiller began 21 years ago.

While national prices are dropping, what will this mean for your local area? Understanding local price and sales trends is the first step to answering this question.  Here are five cities we thought were worth highlighting.

• Philadelphia, PA
  
• Miami, FL
• San Francisco, CA
• Brooklyn, NY
• Detroit, MI

You can also enter your city on any of these pages and select "More Market Trends" to get a detailed breakdown of sales and listing price trends for the past 5 years.

How do you think your area will fare?