Housing Slide Continued In January

March 25, 2008

The S&P/Case-Shiller indexes fell further in January.

The S&P/Case-Shiller Home Price Indexes dutifully did their part in continuing to warn the United States about its little recession problem with the release Tuesday of the index readings for January.

The more concentrated 10-city composite index was down a record 11.4% compared to the same period a year ago. But the 20-city composite wasn't far behind with a 10.7% decline.


Although some people continue to protest that a recession is not in the cards, the monthly release by S&P has been a regular reminder that concerns about the economy are not a mass paranoid delusion. At the very least, the nation's housing market is in a lot of trouble.

If you want further proof, consider the fact that currently only one metropolitan statistical area (MSA) out of 20 showed positive growth in home prices as of the end of January. Sole survivor Charlotte showed a 1.8% year-over-year increase, while previous holdouts Seattle and Portland both slipped beneath the waters with declines of 1.3% and 0.5%, respectively. However, Charlotte, Seattle and Portland remained the best-performing MSAs, even with the declines.

Metropolitan Area
Change (%)
Change (%) 1-Year Change (%)
Atlanta 127.08 -1.80% -1.50% -4.80%
Boston 162.59 -1.20% -1.70% -3.40%
Charlotte 131.7 -0.20% -0.60% 1.80%
Chicago 156.47 -2.20% -1.00% -6.60%
Cleveland 108.49 -3.20% -1.10% -8.50%
Dallas 118.56 -1.80% -1.30% -3.30%
Denver 128.98 -1.50% -1.80% -5.10%
Detroit 100.17 -3.00% -1.80% -15.10%
Las Vegas 186.05 -5.10% -2.90% -19.30%
Los Angeles 224.41 -3.70% -3.10% -16.50%
Miami 225.4 -2.70% -2.60% -19.30%
Minneapolis 151.16 -3.00% -2.10% -10.00%
New York 200.49 -0.90% -1.10% -5.80%
Phoenix 180.06 -4.10% -3.50% -18.20%
Portland 178.81 -2.00% -0.60% -0.50%
San Diego 197.45 -2.50% -3.40% -16.70%
San Francisco 183.81 -2.90% -3.20% -13.20%
Seattle 181.62 -1.80% -1.20% -1.30%
Tampa 194.64 -2.70% -1.60% -15.00%
Washington 212.83 -2.50% -2.40% -10.90%
Composite-10 196.06 -2.30% -2.20% -11.40%
Composite-20 180.65 -2.40% -2.10% -10.70%

Source: Standard & Poor's and Fiserv
Data through January 2008

The worst-performing MSAs on an annual basis were Las Vegas and Miami, which were down a rather staggering 19.3%. Meanwhile, Phoenix was down 18.2%. Ten of the 20 MSAs showed annual declines in the double digits; 16 of the MSAs achieved record annual lows.

Once again, for the fifth month in a row, all of the MSAs were down on a month-over-month basis.

"Unfortunately it does not look like early 2008 is marking any turnaround in the housing market, after the declining year recorded throughout 2007. Home prices continue to fall, decelerate and reach record lows across the nation," said David M. Blitzer, chairman of the Index Committee at Standard & Poor's. He added that 13 of the 20 MSAs saw their biggest monthly declines in January.

The National Association of Realtors released its figures for January last month, although their methodology is somewhat different. NAR says that according to their calculations, the median sale price of existing homes of all types - not just single-family houses - fell 4.6% on an annual basis as of January. However, the more recent figures from NAR for February indicate that median home prices fell even further over the next month to an 8.2% annual decline.

The good news from NAR is that February also saw a seasonally adjusted 2.9% increase in the number of sales from January and a 3% reduction in housing inventory, so the real estate free fall may be easing up a bit. We'll see what the S&P/Case-Shiller indexes say next month.



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