The S&P/Case-Shiller Home Price Indices post record decline in December

The S&P/Case-Shiller Home Price Indices were released today reflecting data through December 2007.


Prices for the Composite-10 declined by 2.28% from November 2007 to December 2007. Prices for the Composite-10 declined by 9.82% from December 2006 to December 2007. This was both the largest monthly and annual decline on record for the Composite-10. For 3 months in a row, a new record in declines has been set for monthly and annual declines. Prices in the Composite-10 are now 11.37% off their peak set in June 2006. Seattle, Portland, and Charlotte are the only cities in the Composite-20 to show annual gains.

Using the CME futures, I have constructed what the futures market is expecting home prices to do over the next few years. The futures market is expecting the U.S. Housing market to bottom in 2011. 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.

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 showing 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.






Here is an update to Robert Shiller’s chart going back to 1890. The home prices in this chart have been adjusted for inflation, whereas all the previous charts have not. This previous post had some more of his charts. The historical data from this chart comes from his website that gives supplemental data to his book, “Irrational Exuberance”, a book I highly recommend.

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