S&P/Case-Shiller Home Price Indices

The S&P/Case-Shiller Home Price Indices were released today reflecting data through November 2007. The 10-City Composite’s year over year decline of 8.4% is a new record decline. The second largest year over year decline was last month when the index declined by 6.7%. The previous largest year over year decline on record was 6.3% recorded in April 1991. The 20-City Composite declined 7.7% year over year. Every city in the 20-City composite posted declines in November 2007 over October 2007. Only Charlotte, Portland and Seattle gained year over year.

The cities in the Composite-10 also have futures trading on the Chicago Mercantile Exchange (CME). The 10 other cities that are part of the Composite-20 are not traded on the CME. The Case Shiller index is published on the last Tuesday of each month reflecting data ending two months prior. They analyze the change in price of repeat sales. The data for each month is a 3 month average. Today, January 29, they published data for November 2007 which was a 3 month average of repeat sales in September, October, and November of 2007. There are four quarterly futures contracts (February, May, August, and November). The February contract represents the December 2007 data (an average of repeat sales for October, November, December.) One contract is $250 times the current value of each respective housing index value (if the index is at 200, then the contract would be $50,000).

Here are some charts of the individual markets. The first 3 charts show each city in the Composite-10. The last chart is of Charlotte, Portland, and Seattle (these cities are not traded on the CME and therefore do not have any future prices on the chart), the only 3 cities not to post year over year declines.

I have utilized the futures prices to show what the market is projecting to happen to values through 2012. I used the last actual trade price except in cases when a current bid was higher or when a current ask was lower; in those cases I used the bid or ask. I converted the index for each city to represent their median single family sales price (setting September 2007 to equal the 3rd quarter median single family sales price as published by the NAR.)

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