The S&P Case-Shiller home price index for July 2008 was released today by Standard and Poors. The composite-10 declined 1.06% from June 2008 and declined by 17.49% from July 2007. The composite-10 is now down 21.14% from its peak. All 20 individual markets are still down year over year with Las Vegas and Phoenix down the most at -29.90% and -29.27% respectively. Charlotte and Dallas are down the least year over year at -1.77% and -2.50% respectively. 6 markets were up in July compared to the previous month (Denver, Boston, Atlanta, Detroit, Minneapolis, and Dallas). The markets with the biggest declines from the peak are also declining the fastest; and some of the markets that declined the least are starting to rise. 8 markets have now dropped over 25% from their peak.
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The CME futures market is pricing in a further drop of -9.48% by next July for the composite-10. The home price index is not seasonally adjusted. In the last 20 years, home prices have averaged appreciation of 5.29% a year. March through August are typically the strongest months for appreciation and home prices have on average appreciated by 4.40% during that 6 month period. September through February are the weakest months; home prices have on average appreciated by only 0.89% during that 6 month period. In 2007, the declines were moderate in the first half of the year and started rapidly declining in August. The month to month change in the composite-10 bottomed in February when it declined by 2.80% in one month and peaked in June with a 0.61% decline over the previous month. S&P Case-Shiller index is a three month average. The existing homes report issued by the National Association of Realtors uses seasonally adjusted median prices. Prices peaked in June 2008 and dropped in July and even faster in August.
The CME futures market is pricing in that housing will bottom at 151.6 in March 2010. This is a 15.1% further drop from July 2008's mark of 178.46. The CME futures are pricing in that the home price index will recover to 160 by September 2012.
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