Case Shiller Home Price Index Falls at Record Pace

The S&P/Case-Shiller Home Price Indices were released today reflecting data through January 2008.

The Composite-10 posted its largest annual decline on record of 11.41%. Prices for January were lower than December 2007 by 2.22%. The index has now declined for 19 months in a row.

Charlotte is now the only city in the Composite-20 to show a year over year gain. Seattle and Portland slipped from being positive last month to the negative column.

Using the CME futures, I have constructed what the futures market is expecting home prices to do over the next few years. The CME futures market is thinly traded. This previous post goes into detail on the CME futures market and my methodology for constructing the futures info. I have smoothed out the CME futures charts by taking out some data points that reflected old data because there hasn’t been recent activity. Due to limited activity, I am showing prices for the individual cities one year out. The Composite index has more data and the charts reflect prices through 2010.

Here are the charts for the 10 cities in the Composite-10 with their projected future values. This is followed by the 3 cities in the Composite-20 to last show annual gains (Seattle, Portland, and Charlotte). These cities are not traded on the CME and therefore do not have projected values. You can click on the charts for a larger view.

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