The closely watched Standard & Poors/Case-Shiller Home Price Indices were released on Wednesday, revealing the 10th consecutive month of negative annual returns and the 23rd consecutive month of decelerating returns across the nation.
This highly regarded analysis of real estate values for 20 of the largest metro areas in the U.S. uses a repeat-sales methodology, unlike the National Association of Realtors which uses median values for its ultimately skewed figures. The Case-Shiller method eliminates "non-arms length" transactions and other questionable data points to create their indices.
Prices are down 6.7% annually for their Composite-10 and 6.1% for the Composite-20, using data through October of 10 and 20 of the largest MSAs, respectively. The 6.7% annual drop is the largest in the 20 years the Case-Shiller indices have been calculated, with the previous being 6.3% in April 1991.
On a monthly basis, prices fell 1.4% for both indices - the largest monthly decline in over seven years. Only Portland, Charlotte and Seattle have positive annual gains through October, but all three are experiencing accelerating monthly declines. Eleven of the 20 MSAs recorded their largest monthly decline in 20 years in October. That just cannot be good when it's spread across all regions of the country.
The San Francisco MSA (San Francisco, Marin, Alameda, Contra Costa and San Mateo counties) revealed a 6.2% annual price decline with a 2.1% drop from September to October.
Some of these negative records should be broken in the coming months and year. Stay tuned as the Case-Shiller indices will be closely monitored right here. And if you are a betting man or woman, you can even put your money where your mouth is by buying housing futures or options on futures via the Chicago Mercantile Exchange using these same indices. Now there is a platform to bet on the rise and fall of real estate values without actually owning real estate.
What a country.