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S&P CoreLogic Case-Shiller National Home Price Index Shows Home Prices End The Year 6.3% Higher Than 2016

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New York, NY – Feb. 27, 2018 (PRNewswire) S&P Dow Jones Indices today released the latest results for the S&P CoreLogic Case-Shiller Indices, the leading measure of U.S. home prices. Data released today for December 2017 shows that home prices continued their rise across the country over the last 12 months. More than 27 years of history for these data series is available, and can be accessed in full by going to www.homeprice.spdji.com. Additional content on the housing market can also be found on S&P Dow Jones Indices’ housing blog: www.housingviews.com.

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YEAR-OVER-YEAR

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 6.3% annual gain in December, up from 6.1% in the previous month. The 10-City Composite annual increase came in at 6.0%, no change from the previous month. The 20-City Composite posted a 6.3% year-over-year gain, down from 6.4% in the previous month.

Seattle, Las Vegas, and San Francisco reported the highest year-over-year gains among the 20 cities. In December, Seattle led the way with a 12.7% year-over-year price increase, followed by Las Vegas with an 11.1% increase, and San Francisco with a 9.2% increase. Nine cities reported greater price increases in the year ending December 2017 versus the year ending November 2017.

The charts on the following page compare year-over-year returns of different housing price ranges (tiers) for the top two cities, Seattle and Las Vegas.

MONTH-OVER-MONTH

Before seasonal adjustment, the National Index posted a month-over-month gain of 0.2% in December. The 10-City and 20-City Composites both reported increases of 0.2%. After seasonal adjustment, the National Index recorded a 0.7% month-over-month increase in December. The 10-City and 20-City Composites both posted 0.6% month-over-month increases. Twelve of the 20 cities reported increases in December before seasonal adjustment, while all 20 cities reported increases after seasonal adjustment.

ANALYSIS

“The rise in home prices should be causing the same nervous wonder aimed at the stock market after its recent bout of volatility,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Across the 20 cities covered by S&P CoreLogic Case Shiller Home Price Indices, the average increase from the financial crisis low is 62%; over the same period, inflation was 12.4%. None of the cities covered in this release saw real, inflation-adjusted prices fall in 2017. The National Index, which reached its low point in 2012, is up 38% in six years after adjusting for inflation, a real annual gain of 5.3%. The National Index’s average annual real gain from 1976 to 2017 was 1.3%. Even considering the recovery from the financial crisis, we are experiencing a boom in home prices.

“Within the last few months, there are beginning to be some signs that gains in housing may be leveling off. Sales of existing homes fell in December and January after seasonal adjustment and are now as low as any month in 2017. Pending sales of existing homes are roughly flat over the last several months. New home sales appear to be following the same trend as existing home sales. While the price increases do not suggest any weakening of demand, mortgage rates rose from 4% to 4.4% since the start of the year. It is too early to tell if the housing recovery is slowing. If it is, some moderation in price gains could be seen later this year.”

SUPPORTING DATA

Table 1 below shows the housing boom/bust peaks and troughs for the three composites along with the current levels and percentage changes from the peaks and troughs.

Chart 1

Table 2 below summarizes the results for December 2017. The S&P CoreLogic Case-Shiller Indices are revised for the prior 24 months, based on the receipt of additional source data.

Chart 2

Sources: S&P Dow Jones Indices and CoreLogic

Data through December 2017

Table 3 below shows a summary of the monthly changes using the seasonally adjusted (SA) and non-seasonally adjusted (NSA) data. Since its launch in early 2006, the S&P CoreLogic Case-Shiller Indices have published, and the markets have followed and reported on, the non-seasonally adjusted data set used in the headline indices. For analytical purposes, S&P Dow Jones Indices publishes a seasonally adjusted data set covered in the headline indices, as well as for the 17 of 20 markets with tiered price indices and the five condo markets that are tracked.

Chart 3

Sources: S&P Dow Jones Indices and CoreLogic

Data through December 2017

For more information about S&P Dow Jones Indices, please visit www.spdji.com.

ABOUT S&P DOW JONES INDICES

S&P Dow Jones Indices is the largest global resource for essential index-based concepts, data and research, and home to iconic financial market indicators, such as the S&P 500® and the Dow Jones Industrial Average®. More assets are invested in products based on our indices than products based on indices from any other provider in the world. Since Charles Dow invented the first index in 1884, S&P DJI has become home to over 1,000,000 indices across the spectrum of asset classes that have helped define the way investors measure and trade the markets.

S&P Dow Jones Indices is a division of S&P Global (NYSE: SPGI), which provides essential intelligence for individuals, companies, and governments to make decisions with confidence. For more information, visit www.spdji.com.

FOR MORE INFORMATION:

David Blitzer
Managing Director and Chairman of Index Committee
New York, USA
(+1) 212 438 3907
david.blitzer@spglobal.com

Soogyung Jordan
Global Head of Communications
New York, USA
(+1) 212 438 2297
soogyung.jordan@spglobal.com

Luke Shane
North America Communications
New York, USA
(+1) 212 438 8184
luke.shane@spglobal.com

S&P Dow Jones Indices’ interactive blog, HousingViews.com, delivers real-time commentary and analysis from industry experts across S&P Global on a wide-range of topics impacting residential home prices, homebuilding and mortgage financing in the United States. Readers and viewers can visit the blog at www.housingviews.com, where feedback and commentary is welcomed and encouraged.

The S&P CoreLogic Case-Shiller Indices are published on the last Tuesday of each month at 9:00 am ET. They are constructed to accurately track the price path of typical single-family homes located in each metropolitan area provided. Each index combines matched price pairs for thousands of individual houses from the available universe of arms-length sales data. The S&P CoreLogic Case-Shiller U.S. National Home Price Index tracks the value of single-family housing within the United States. The index is a composite of single-family home price indices for the nine U.S. Census divisions and is calculated quarterly. The S&P CoreLogic Case-Shiller 10-City Composite Home Price Index is a value-weighted average of the 10 original metro area indices. The S&P CoreLogic Case-Shiller 20-City Composite Home Price Index is a value-weighted average of the 20 metro area indices. The indices have a base value of 100 in January 2000; thus, for example, a current index value of 150 translates to a 50% appreciation rate since January 2000 for a typical home located within the subject market.

These indices are generated and published under agreements between S&P Dow Jones Indices and CoreLogic, Inc.

The S&P CoreLogic Case-Shiller Indices are produced by CoreLogic, Inc. In addition to the S&P CoreLogic Case-Shiller Indices, CoreLogic also offers home price index sets covering thousands of zip codes, counties, metro areas, and state markets. The indices, published by S&P Dow Jones Indices, represent just a small subset of the broader data available through CoreLogic.

Case-Shiller® and CoreLogic® are trademarks of CoreLogic Case-Shiller, LLC or its affiliates or subsidiaries (“CoreLogic”) and have been licensed for use by S&P Dow Jones Indices. None of the financial products based on indices produced by CoreLogic or its predecessors in interest are sponsored, sold, or promoted by CoreLogic, and neither CoreLogic nor any of its affiliates, subsidiaries, or predecessors in interest makes any representation regarding the advisability of investing in such products.

Homeowners Placed Under House Arrest

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Contributor: Ron Gitter

Ron Gitter

Ron Gitter

The Never Ending Case-Shiller Bummer

It’s been a rough few days for housing statistics. First and foremost, the Standard and Poors Case-Shiller Home Price Index, issued on March 29, 2011, was downright depressing. As indicated in the press release, January 2011 home prices slipped below December figures in all but 2 of the 20 major cities tracked in the report. Economists crunch numbers for a living and I have no real doubt about the accuracy of the calculations. But after more than three years of unrelenting doom and gloom in the housing market, one starts to wonder what it all means for the owners of those homes on which the data is based.

Housing’s Dirty Little Secret

Even if the housing market starts to improve throughout the country in the next few months, and actually begins an upward trend, the damage done to middle class homeownership can’t be estimated even by using the most sophisticated algorithms. As a result of changing business models, many Americans looked to the equity in their home as their 401K plan and the foundation for retirement. For many homeowners, equity equaled net worth. With that equity evaporating, and an inability to sell a home even at drastically reduced prices, lives have been so dramatically impacted financially, that a “housing recovery,” if and when it happens, may not really matter.

The Migration is on Hold

Remember those 80 million baby boomers who were about to retire and move all over the country? In places like Arizona, Florida, Nevada and North Carolina, builders counted on that wave of retiring boomers to sell their homes in high property tax states and to move to cities with lower taxes, attractive lifestyles and better weather. But if you can’t sell your home, and if your equity has disappeared even if you can sell your home, you won’t be relocating any time soon and the oversupply of inventory can’t be absorbed. That inability to sell has resulted in a paralysis taking over the housing market that the monthly movement in housing statistics doesn’t really capture. Unfortunately, the gears of the real estate economy that have always been counted on to churn out the jobs are now frozen.

New York Goes “Crazy Eddie”

That’s not to say that all markets are suffering the same fate. At least in the New York metropolitan area, the data shows that trading volume has improved and the market appears to have stabilized. One could even argue that the upward trend hoped for by the City’s real estate professionals may have started to materialize. But market stability has been achieved through deep discounting. Paraphrasing the guy in the Crazy Eddie commercials, the housing prices in New York “are insane!” As Vivian Toy’s recent article in the Times pointed out, the prices of studio apartments have plummeted to a point of absurdity, creating a window for entering the New York market that is unprecedented in recent memory. Celebrity real estate does not fare much better. Although the glitterati continue to throw millions of dollars at a small number of high end properties, the pricing in many cases is as depressed as more modest properties. There are just bigger winners and losers. And a few large transactions can’t revitalize the market and incentivize continued buying and selling. So even in New York, the cycle of immobility continues.

And Now for A Double Dip…

Just to make things interesting and add to the woe pile, Robert Reich in his Huffington piece on March 31st, asked why Americans “aren’t being told the truth about the economy?” Citing a gaggle of scary statistics, he took stock of the dismal state of things and dared to speak the phrase that haunts the policy makers: the double dip recession. Although the double dip alarm needs to be sounded, I have to ask, are Americans really that dumb? After more than three years of catastrophic unemployment, a decimated housing market and the downward spiral of dwindling net worth, is anyone really counting on the truth being told about how badly things are going? I don’t think so. Just ask any homeowner… they already got that memo.

About Ron Gitter:

I am a practicing attorney with offices in Manhattan, focusing primarily on real estate, business and commercial matters. Over the past 30 years, I have handled hundreds of co-op and condo transactions throughout the greater New York metropolitan area and have a reputation for solving problems and getting complicated transactions done.

CoopandCondo.com is a resource blog for purchasers, sellers and owners of co-ops and condos in New York City. My goal is to demystify the process, so that my readers are able to make informed decisions when it comes to all facets of co-op and condo transactions and ownership. Articles from the blog have been cited or featured online in Huffington Post, curbed, brickunderground, NYTimes online, serviceyoucantrust, theapplepeeled, habitatmag and a variety of other web and print publications. I am also a contributor on residential real estate matters for NY1, a regional television news station in New York City.

I am a member of the New York State Bar Association and its related Committee on Condominiums and Cooperatives.

My wife and I reside in Manhattan and in Wilmington, NC.

For more information about my firm, I can be reached at (212) 826-2405 and by E-mail at realities@coopandcondo.com.