South Florida Home Prices Decline Slowly

South Florida Real Estate

Miami, Florida – Data through December 2009, released today by Standard & Poor’s for its S&P/Case-Shiller Home Price Indices, show that the U.S. National Home Price Index fell in the fourth quarter of 2009, but it has improved in its annual rate of return compared to third quarter reports.

The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 2.5 percent decline in the fourth quarter of 2009 versus the fourth quarter of 2008. While down, it’s a significant improvement over the annual rates reported in the first, second and third quarters of the year, at -19.0 percent, -14.7 percent and -8.7 percent, respectively.

In December, the 10-City and 20-City Composites recorded annual declines of 2.4 percent and 3.1 percent, respectively. These two indices, which are reported monthly, have seen improvements in their annual rates of return every month since the beginning of the year.

“As measured by prices, the housing market is definitely in better shape than it was this time last year, as the pace of deterioration has stabilized for now. However, the rate of improvement seen during the summer of 2009 has not been sustained,” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s.

“In the most recent months, we are seeing fewer and fewer MSAs reporting monthly gains in prices. Only four cities saw month-to-month improvements in December over November when you look at the raw data. We are in a seasonally slow period for home prices, however, so it is not surprising to see better statistics in the seasonally-adjusted data, where 14 of the markets and the two monthly composites all rose in December. Similarly, the National Composite fell by 1.1 percent in the fourth quarter, but rose by 1.6 percent on a seasonally-adjusted basis.”

As of the 4th quarter of 2009, average home prices across the United States are at similar levels to what they were in the summer of 2003. The 4th quarter values fell when compared to the 3rd quarter; however, the decline in the annual rate of return has significantly improved.

The 10-City and 20-City Composites continue to show improvement in their annual rates of return. In fact, all 20 metro areas and the two Composites saw improvement in their annual returns compared to November’s data. Only three cities – Detroit, Las Vegas and Tampa – still showed double digit annual rates of decline as of the end of 2009. Miami, Phoenix and Seattle all moved above such rates with December’s report.

Looking at the monthly statistics, 15 of the 20 metro areas showed a decline in December over November, with Chicago posting the sharpest decline, down 1.6 percent. Las Vegas finally posted its first positive print in more than three years, with +0.2 percent. The Southwest continues to be a bright spot, with San Diego posting its eighth consecutive monthly increase, and Los Angeles and Phoenix both posting their seventh. Three of the markets – Charlotte, Seattle and Tampa – posted new low index levels as measured by the past four years.

In other words, any gains they might have seen in recent months have been erased and December is now considered their current trough value, according to the data.

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Homebuilding forecast: Modest growth in 2010

Ft. Lauderdale Real Estate - Dean Isenberg Realtor

Miami – Jan. 20, 2010 – The fragile housing recovery should gather momentum this year as the economy strengthens, but high unemployment at least through 2011 will make for a slow turnaround, housing experts said Tuesday.

The panel of economists at the International Builders’ Show in Las Vegas agreed broadly on the outlook for the housing market and economy. Both, they said, had turned a corner, but there are slim prospects for a swift rebound.

“It won’t be a strong recovery, but it will be a recovery,” said David Crowe, chief economist for the National Association of Home Builders.

His forecast calls for sales of new and previously occupied homes to weaken after tax credits for homebuyers expire in April. But 2010 sales of new homes will be up by more than one-third, he said, and almost 7 percent higher for resales.

Crowe also sees home prices remaining stable going forward, though some cities may still see some slight declines in the coming months.

“I believe we’ve seen the worst of the house price declines ... The stage is set for the consumer to return,” Crowe said.

He expects builders to ramp up construction this year, with newly built homes totaling around 700,000. That would be a 25 percent increase over his tally for 2009. While he anticipates the economy will add some jobs in the April-June period, he projects unemployment will peak this year at 10.2 percent and then fall gradually to around 8 percent by the end of next year.

But homebuilders’ fortunes have brightened in recent months. Low interest rates and an $8,000 tax credit for first-time home buyers helped stoke demand for homes. The incentive was scheduled to expire at the end of November, but Congress extended the deadline through April and added a $6,500 tax credit for current homeowners who move.

Still, recent figures have raised doubts about how strong demand will be in the coming months.

New homes sales tumbled 11 percent in November from October to the lowest level since last spring. The number of people preparing to buy a home in November also dropped.

That’s left many homebuilders nervous that demand is weakening. Homebuilders’ confidence, measured by an NAHB’s index, fell this month to 15. It was the second-straight monthly decline and the lowest level since June.

The index reflects a survey of 504 residential developers nationwide. Index readings below 50 indicate negative sentiment about the market.

David Berson, chief economist for mortgage insurer PMI Group, said he expects mortgage delinquencies and foreclosures to climb this year. But he anticipates that banks and other mortgage companies will continue to hold properties on their books, rather than dumping them on the market at depressed prices.

“That does mean it will be longer before we start to get a real recovery in home prices,” Berson said. “By the time we get to 2011, the majority of the states should have price gains.”

He projects home prices fell almost 13 percent in 2009 from the prior year. His forecast calls for home prices to decline about 5 percent early this year, but end the year flat.

Freddie Mac Chief Economist Frank Nothaft, meanwhile, said he sees home prices to decline 3 percent this year. His forecast calls for mortgage rates to remain below 6 percent this year.

For more information regarding the above web Blog, please call Dean or Bonnie Isenberg at 305-936-2489 / 800-819-5466 or visit them on-line at A-Realtor.Com

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