Another look at the regions

The broadly positive April 2012 report for the S&P/Case-Shiller Home Price Indices left many wondering if some of the regional housing markets have finally turned around.  As viewed through the S&P/Case-Shiller 20-City Home Price Indices, Boston’s average home prices peaked first in the mid-2000s (September 2005) and Charlotte’s last (August 2007). The 10-City peaked in June 2006 and the 20-City in July 2006.  Seven of the markets covered by our indices appear to have hit their recent lows in the spring of 2009 – Boston, Dallas, Denver, Los Angeles, San Diego, San Francisco and Washington DC.  The remaining 13 and both Composites were more recent, in 2011 or 2012.

We regularly update the charts below to highlight the relative magnitude of the rise in home prices and subsequent collapse across the cities. 

S&P/Case-Shiller Home Price Indices.

Las Vegas had the largest percentage decline from its peak (August 2006) to its low (March 2012). Average home prices in that market grew by 135% from January 2000 until its peak, and as of March 2012 were down 61.7% from that peak. The city saw home prices increase by 1.1% in April 2012, but they are still down 61.3% from the peak and off 5.8% versus April 2011. Prices in Las Vegas are more than 10% below their January 2000 levels, back to about the same values they averaged at the end of 1996.

Detroit, Miami, Phoenix and Tampa also saw sharp price deterioration. Detroit never experienced a real price boom in the early/mid-2000s.  At their December 2005 peak, prices were up only 27% from January 2000.  In the downturn, however, prices in that market fell by more than 49% through their April 2011 low and were down about 48.6% as of April 2012.

When they reached their peak in December 2006, Miami home prices had grown by about 180% from January 2000. As of April 2012, the market had fallen by about 49.7%. Phoenix prices rose by 127% through their June 2006 peak, but have fallen by about 52.1%. Tampa rose about 138% at its July 2006 peak, and was down about 46.5% from there.

Los Angeles and San Diego both grew by between 150% and 175%, and have both fallen about 40% through April 2012. While they did not grow as much as the Sun Belt states, Detroit (down 48.6%, as noted above) and San Francisco (-40.4%) both saw peak-to-April 2012 collapses in excess of 40%.

As of April 2012, 12 cities and both Composites have fallen by more than 30% from their relative peaks and these are not confined to the Sun Belt. The Mid West has seen large price declines in Chicago
(-38.4%), Detroit (-48.6%) and Minneapolis (-35.8%), the North West in San Francisco (-40.4%) and Seattle (-30.4%), and the South East in Atlanta (-38.1).

With April 2012 index levels below 100, Atlanta, Cleveland, Detroit and Las Vegas are the markets where average home prices are below their January 2000 levels. Doing relatively better, at -7.9% and
-10.4% respectively, Dallas and Denver are the only markets covered by our indices where the declines from peak are below 15.0%.  Charlotte is the next smallest, down 18.2%.

The posts on this blog are opinions, not advice.
Please read our disclaimers for Ratings Services, Indices, Equity Research, Securities Evaluations and Risk Solutions.

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