The S&P Case-Shiller home price index for November 2008 was released today by Standard and Poors. The composite-10 declined 2.20% from October 2008 and declined by 19.09% from a year ago. The composite-10 is now down 26.62% from its peak. All 20 individual markets in the composite-20 are down year over year with Las Vegas and Phoenix down the most at -31.65% and -32.87% respectively. Dallas and Denver are down the least year over year at -3.31% and -4.28% respectively. All 20 markets were down in November compared to the previous month. The markets with the biggest declines from the peak are also declining the fastest. 9 markets have now dropped over 25% from their peak. The Composite-10 has now declined at a faster pace year over year for 23 straight months now.
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The CME futures market is pricing in a further drop of -11.17% by next November 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 composite-10 did not record a 1% loss month over month until October 2007. Right now we are declining at a faster pace than we did last year at this time. 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 uses a three month average. The existing homes report issued by the National Association of Realtors gives a glimpse of how home prices are doing (although it uses median prices instead of the more accurate method of paired sales that is utilized by S&P Case-Shiller). Prices peaked in June 2008 and dropped by 2.2% month over month in July, by 3.4% in August, by 5.8% in September, by 2.6% in October, by 3.3% in November, and by 2.7% in December. The CME futures market is pricing in that housing will bottom at 142 in September 2010. This is a 14.5% further drop from November 2008's mark of 166.05. The CME futures are pricing in that the home price index will recover to 152 by September 2012.
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