Seasonally-Adjusted Home Prices Declined in May

Home price gains continued to slow in May, posting smallerrnannual increases than In April the S&P Dow Jones Indices said today.  The Indices’ Case-Shiller 10-City CompositernIndex was up 9.4 percent compared to May 2013 and the 20-City was 9.3 percentrnhigher.  In April the two compositesrnposted annual increases of 10.9 and 10.8 percent respectively.</p

Both Composites increased by 1.1 percent from April to Mayrnand for the second straight month all 20 cities had positive returns.  But that’s only true on an unadjusted basis.  When it comes to to home price data, seasonal buying/selling trends tend to be kind to prices in the Spring and Summer months.  Adjusting for those affects, prices were down 0.3 percent in May–the first seasonally-adjusted decline in more than 2 years.</p

Regionally, Charlotte’s increase of 1.4 percent was itsrnhighest of the year and it, along with Tampa which had a 1.8 percent increase,rnwere the only two cities where the annual rates of increase did not decelerate.  Other large monthly gains were seen in SanrnFrancisco at 1.6 percent and Chicago at 1.5 percent.  On the low end of the scale Phoenix and SanrnDiego, up 0.4 and 0.5 respectively, were the only cities with gains under onernpercent.</p

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“Home prices rose at their slowest pace since February ofrnlast year,” David M. Blitzer, Chairman of the Index Committee at S&P DowrnJones said.  “The 10- and 20-CityrnComposites posted just over 9 percent, well below expectations.  Month-to-month, all cities are posting gainsrnbefore seasonal adjustment; after seasonal adjustment 14 of 20 were lower.”   </p

Nine cities still posted double-digit annual increases inrnMay.  The largest were Las Vegas (16.9 percent),rnSan Francisco (15.4 percent), Miami (13.2 percent), and San Diego (12.4 percent).  The San Francisco and San Diego increasesrnrepresented a three point deceleration in the rate of increase.  Double digit gains were also posted by LosrnAngeles, Detroit, Atlanta, Tampa, and Portland,</p

“Housing has been turning in mixed economic numbers in thernlast few months,” Blitzer said.  “Pricesrnand sales of existing homes have shown improvement while construction and salesrnof new homes continue to lag.  At thernsame time the broader economy and especially employment are showing largerrnimprovements and substantial gains.</p

Average home prices across the U.S. in May were back to summerrn2004 levels.  The peak to current declinernfor both the 10- and 20- City Composites measured from July/July 2006 was 17-18rnpercent.  Since the post-crash low inrnMarch 2012 the 10-City Composite has recovered by 26.5 percent and the 20-Cityrnby 27.3 percent.</p

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Nine cities showed higher monthly increases in May than inrnApril.  In addition to Charlotte andrnTampa they included Cleveland, Detroit, Las Vegas, Los Angeles, Miami,rnMinneapolis, and New York.  Dallas andrnDenver continue to set new price peaks while Detroit remains the only cityrnbelow its January 2000 base value at a current index of 96.11.</p

The Case-Shiller indices are constructed to accurately trackrnthe price path of typical single-family homes located in each of the 20rnmetropolitan areas.  Ach index combinesrnmatched prices pairs from the available universe of arms-length salesrndata.  The indices have a base value ofrn100 in January 2000 so a home with a current index value of 150 has increasedrnin value by 50 percent since that date.

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