What's the third quarter S&P Case-Shiller report telling us
It seems like a good time to review the most recent S&P Case-Shiller report and see what it's telling us about home prices.
“Data through September 2011, released today by S&P Indices for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, show that nationally home prices did not register a significant change in the third quarter of 2011, with the U.S. National Home Price Index up by only 0.1% from its second quarter level. The national index posted an annual decline of 3.9%, an improvement over the 5.8% decline posted in the second quarter. Nationally, home prices are back to their first quarter of 2003 levels.”
While Case-Shiller doesn't specifically analyze the Charleston real estate market and seems to be heavily weighted toward some of the most distressed markets around the country (after all, Las Vegas is not really that important a city and Detroit is a long way from its heyday), the best thing about Case-Shiller is that it uses a repeat sale basis which is much better than either median or average price (which are subject to the mix of homes sold) but unfortunately it omits new construction which despite yesterday's dismal new home report is still very active in the Charleston area.
Anyway, prices nationally were basically flat in the 3rd quarter from the 2nd quarter and declined at a slightly lesser rate from last year. Case-Shiller judges that home prices are back to 2003 and I would argue that depending on the area of Charleston that you are analyzing that prices locally are either back to the same 2003 to somewhere in 2005.
As to the triple dip that has been predicted by so many, the chart below just isn't showing it yet and whether or not the long awaited shadow inventory ever arrives will probably determine whether prices will decline, stabilize or once again begin to appreciate. I personally think that prices will remain somewhat flat for the next year or so unless there is some kind of major shock to the economy.
