Case-Shiller: Home Prices Down in January 2012

The verdict is in for January 2012, and the Case-Shiller index of home prices has now fallen to its lowest level since peaking in 2006. At the beginning of 2011 I had mentioned that it appeared we were heading for a double dip in housing prices. It seems that this has played out and we have indeed double-dipped.

The S&P Case-Shiller 20-City Composite Index reported a 0.8% decline between December 2011 and January 2012, and a 3.8% decline since January 2011. This brings home prices back to levels seen in 2003. This puts home prices still about 35% above their 2000 levels when adjusted for inflation. The below graph shows the Case-Shiller Index pegged to 2000 levels (2000 = 100.00 in index).

Case-Shiller Index January 2012

If you want an interactive graph, I highly recommend the New York Times Case-Shiller Graph.

If you live in or near one of the major cities tracked, then that information might prove to be more interesting and relevant to you. Atlanta was down 2.1% for the month, and a total decline of 14.8% over the last six months. San Francisco was the biggest monthly loser, down 2.5%. However, each of the three California cities tracked (San Diego, Los Angeles, and San Francisco) have not fallen below their 2009 low.

Case-Shiller January 2012 Data Table

I made a table of the data showing 1 month change, change since peak, and change since 2000. It immediately became clear to me that it’s difficult to sort out the affects of the housing crisis, versus the normal demographic affects. Both Atlanta and Detroit are significantly below even their 2000 levels. It’s easy to guess why these cities are below their 2000 levels as people flee those two major cities to move to more desirable locations. It’s also clear the desirable locations with robust job markets have been able to maintain their high values fairly well. Washington D.C. is still up 80% from its 2000 level, and Los Angeles and New York each up 60% since 2000.

Zillow expects that homes prices will stabilize this year. However, keep in mind that banks still hold a lot of mortgages that are in default and should be foreclosed on. I believe that until the inventory of foreclosures has been processed it will be difficult to see any sustained increase in home prices. The banks are smart to not dump all of this inventory on the market because it would depress prices and they would lose big. But until the foreclosure backlog has been processed, I wouldn’t expect home prices to significantly increase.

One Response to “Case-Shiller: Home Prices Down in January 2012”

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  1. Pamilia C. Hayes says:

    Thanks for this information! It is really important to know the situation of Banking system, this will be a such valuable information to us. Again many thanks!

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