Well, the last Tuesday of the month (and the year) has arrived and that means the Case Shiller Home Price Index for October has been published. The index tracks existing home prices in 20 metro areas, and while the index was flat for the composite of those 20 areas, the Tampa index took a 1.6% slide from September’s number.
As the chart shows, the index had been on the rise through the summer months, but September started a new downward trend, so it seems.
Some notes from the Case Shiller press release:
“The turn-around in home prices seen in the Spring and Summer has faded with only seven of the 20 cities seeing month-to-month gains, although all 20 continue to show improvements on a year-over-year basis. All in all, this report should be described as flat.”
“Coming after a series of solid gains, these data are likely to spark worries that home prices are about to take a second dip. Before jumping to conclusions, recognize that the one time that happened at the beginning of the 1980s, Fed policy saw dramatic reversals, which is very different from the stable and consistent Fed policy we have today. Further, sales of existing homes – those included in the S&P/Case-Shiller Home Price Indices – have been very strong in recent months, working off the inventories of houses for sale. At the same time, housing starts remain weak, fears that the market will be swamped by a wave of foreclosures are heard and government programs aimed at the housing market will expire in the first half of 2010.”
And here in Tampa, sales are up and inventories are down, so why the further decline in the index? I think it can be explained due to the fact that a larger percentage of what’s selling more recently is the distressed stuff, short sales and bank-owned properties. As I posted earlier this month, a much larger percentage of our pending listings is made up of short sales and bank-owned properties.
Looking forward, as first-time buyers return to the market to beat the looming tax credit deadline, I would expect that prices remain flat or even begin to bump upwards once again. But the lens in the crystal ball has been quite out of focus as of late. We’ll see.
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