April 2012 data for the S&P/Case-Shiller Home Price Indices were released on Tuesday June 26th, with monthly increases in condo prices in all five of the metro areas covered by our indices – Boston, Chicago, Los Angeles, New York and San Francisco. As a result, none of the cities posted a new low in April 2012, which had been a common theme for the prior six months or so.
The San Francisco index reported the largest increase, up 5.5% in April versus March. The Boston index was next, +3.0%. Condo prices in Chicago, Los Angeles and New York rose by 0.7%, 0.5% and 0.8% in April, respectively.
With April’s report, Boston’s market showed positive annual changes in condo prices for the second consecutive month, up 2.5% versus April 2011. Chicago posted the largest annual decline, -6.8%, with most of the weakness occurring between October 2011 and February 2012. With an index level of 98.02, average condo prices in Chicago are back to their October 1999 levels, erasing more than 12 years of appreciation in value.
After having fallen 19 consecutive months, Los Angeles condo prices were up in both March and April. At an annual rate, they were still down 4.9% versus April 2011. San Francisco’s condo market had fallen 10 consecutive months, but after surging +4.2% and +5.5% in March and April, respectively, the market was down a more benign 2.2% annually. New York also increased for two consecutive months, but not by as much. It was down 0.7% in April versus the same month in 2011.
The chart below compares the index levels for the five condo markets covered by the indices, rebased to 1995 = 100. The grey, blue and red lines represent Chicago, Los Angeles and San Francisco, respectively. Chicago is well below the other cities, showing that average condo prices are back to their October 1999 levels. On average Los Angeles and San Francisco condo market prices are back to their mid-2003 levels. Boston (black) and New York (green) are relatively healthier, with both markets still more than 150% higher than they were in January 1995.
The Boston condo market has shown the most recent stability, as the table below highlights. While only modestly, Boston is still the only market where condo and home prices are increasing at an annual pace. Chicago is the weakest across both housing and condo markets, but Los Angeles is not far behind. New York has shown relative stability in the condo market, but has seen recent weakness in the housing market. Home prices in that market were up only 0.1% in April, and had posted a new post-recession low in March.
The chart below illustrates the differences between Boston, Chicago and New York condo and single-family home prices since 1995. The purple and green lines show that the Boston and New York condo markets are the best relative performers during the housing crisis. Both markets’ condo prices are still up over 160% versus January 1995; whereas Chicago prices are up only about 24% (and as discussed above are back to their October 1999 values). The New York condo market has been fairly stable over the past three years, as seen by the more-or-less sideways movement of the green line since 2009; whereas Boston has been a bit more volatile in terms of the size of its swings over that time period, and the Chicago market continues to weaken. Condo prices in Chicago have fallen by 39.1% since their September 2007 peak; whereas the Boston (-14.3%) and New York (-15.9%) markets have fallen by less than half that rates from their relative 2005/2006 peaks.
The chart below shows the differences between New York, Los Angeles and San Francisco since 2000. The green, grey and orange lines show that the New York condo market has been fairly stable over the past three years, while the California markets have, until very recently, weakened. The LA condo market has fallen by 41.6% since its July 2006 peak; the San Francisco market has fallen by 32.8% since its October 2005 peak; but, as said above, the New York market has only fallen by 15.9% from its February 2006 peak.
Across all cities, however, both the single-family home and condos prices rose in April 2012. The next few months will determine how much of those increases were due to seasonal factors and how much were real.