Only New York condo prices did not weaken as the third quarter ended

September 2011 data for the S&P/Case-Shiller Home Price Indices were released on Tuesday November 29th and we saw declines in condo prices in four of the metro areas – Boston, Chicago, Los Angeles and San Francisco. The Boston index reported the largest decline in September versus August, down 1.4%; but, San Francisco was not far behind, down 1.3%.  The LA condo index reported a decline of 0.7%, and the Chicago index fell by 0.3%. On the flip side, condo prices in New York rose by 0.4% in September.

The last time Los Angeles saw an increase in condo prices was 15 months prior, in July 2010. The index was down 7.4% in September 2011 versus September 2010 and hit a new crisis low in September 2011. While San Francisco’s condo market saw monthly increases in March and April 2011, it declined in 12 of those same 15 months and is down 8.7% versus September 2010, which is worst annual rate of the five markets covered by our indices. Chicago is second down 7.7%.

The chart below compares the index levels for the five condo markets covered by the indices, rebased to 1995 = 100. The blue and red lines represent Los Angeles and San Francisco, respectively. The 15 month declining trend continued for these two markets in September. On average Los Angeles condo market prices are back to their mid-2003 levels; while San Francisco prices are back to mid-2002 levels.

S&P/Case-Shiller Condo Price Indices. Sources: S&P Indices and Fiserv.

On a relative basis the New York home and condo markets are more healthy then the other four, where home and condo prices all fell in September, as the table below highlights. Although a modest growth rate, New York condo prices were the only ones up on an annual basis, +0.9%.

S&P/Case-Shiller Home and Condo Price Indices, comparative statistics.

The chart below illustrates the differences between New York and Los Angeles over almost 12 years. With a September level of 203.78, the New York condo market is the best relative performer coming out of the recent crisis.  Condo prices are still up over 104% versus January 2000.  As we have noted over several months, by comparing the green and grey lines below, you can see that the New York condo market has been fairly stable over the past three years and has been on an upward trend since January 2011; whereas the Los Angeles market has weakened further. The LA condo market has fallen by 39.8% since its July 2006 peak; whereas the New York market has only fallen by 12.0% from its February 2006 peak. While peaking at different times in 2005-2007, Boston, Chicago and San Francisco have fallen by 12.8%, 28.5% and 33.9%, respectively; making Los Angeles and San Francisco the two markets with the highest declines from their relative peaks.

S&P/Case-Shiller Home and Condo Price Indices. Sources: S&P Indices and Fiserv

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