Economy Watch: Case-Shiller Says Many Markets Hit New Lows
- Apr 25, 2012
Just where is that bottom in the housing market? The latest S&P/Case-Shiller indexes, which came out on Tuesday, seem to say that most U.S. markets haven’t quite found it yet. But there was a glimmer of hope for finding those bottoms, since there’s been a small slowing in the rate of the declines.
The indexes, which gauge home prices as of February, showed annual declines of 3.6 percent and 3.5 percent for the 10- and 20-city composites, respectively. In January, the year-over-year declines for the same two composites were 4.1 percent and 3.9 percent, respectively. Nine MSAs—Atlanta, Charlotte, Chicago, Cleveland, Las Vegas, New York, Portland, Seattle and Tampa—and both composites posted new cycle lows as of February 2012.
“While there might be pieces of good news in this report, such as some improvement in many annual rates of return, February 2012 data confirm that, broadly-speaking, home prices continued to decline in the early months of the year,” David M. Blitzer, chairman of the Index Committee at S&P Indices, noted in a press statement. He singled out Atlanta as a particularly hard-hit market, since it has posted its steepest annual rate of decline in the 20-year history of the index, losing 17.3 percent in value since this time last year.
New home sales down in March
The Census Bureau reported on Tuesday that new home sales took a dip in March, coming in at an annualized sales rate of 328,000, down 7.1 percent from the February rate of 353,000 units. The March rate would have actually been a small increase, except that the February rate was revised upward by an unusually large amount. February had originally been tabulated as 313,000 units.
Supposedly a healthy new housing market is somewhere over 600,000 units a year, and so far the homebuilding industry isn’t anywhere close to seeing that. And yet the latest run of monthly data shows some improvement in new home sales. Over the last five months, according to the Census Bureau, new homes sales have averaged an annualized 335,000 units. During the 18 months before that, the annualized sales rate never broke 300,000 units.
The bureau also reported new housing inventory as “normal.” The estimate of new houses for sale at the end of March was 144,000, which represents a supply of 5.3 months at the current sales rate; under six months is considered normal. According to the bureau, a “house is considered for sale when a permit to build has been issued in permit-issuing places, or work has begun on the footings or foundation in nonpermit areas, and a sales contract has not been signed nor a deposit accepted.”
Consumer confidence down, but only very little
The Conference Board said on Tuesday that its Consumer Confidence Index, which had declined slightly in March, was virtually unchanged in April. The index now stands at 69.2 (the confident year 1985 = 100), down slightly from 69.5 in March. The Expectations Index declined to 81.1 from 82.5, while the Present Situation Index improved to 51.4 from 49.9 last month.
“As was the case last month, the slight dip was prompted by a moderation in consumers’ short-term outlook, while their assessment of current conditions continued to improve,” said Lynn Franco, director of the Conference Board Consumer Research Center, in a press statement. “Overall, consumers are more upbeat about the state of the economy, but they remain cautiously optimistic.”
Wall Street too was more upbeat on Tuesday than Monday, but still ended mixed. The Dow Jones Industrial Average gained 74.39 points, or 0.58 percent, while the S&P 500 was up 0.37 percent. The Nasdaq lost 0.3 percent.