The U.S. housing market saw home prices fall for the first time in seven months in November.
“The S&P composite index of home prices in 20 metropolitan areas slipped 0.2 percent in November after a revised 0.1 percent October dip, for a 5.3 percent annual drop,” reported Reuters.
A survey by the news company had predicted a 0.1% November rise in home prices, and October’s prices were first reported as unchanged.
But as clear as this data might be, the U.S. housing market is giving investors some mixed signals.
Home prices in 20 cities climbed for the sixth consecutive month in November… On a seasonally adjusted basis, that is.
David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s, said, “To add more mixed signals, we are in a seasonally weak period for home prices, so the seasonally-adjusted data are generally more positive, with 14 of the markets and both composites showing improved prices in November.”
Bloomberg’s Bob Willis reports that this might be a sign that the market is stabilizing.
Indeed, on an annual basis, the S&P/Case Shiller home-price index dropped 5.3% compared to November 2008. That’s the smallest year-over-year drop in two years, says Willis.
The mixed signals continue when you look at individual cities.
CNNMoney’s Les Christie reports:
Four markets covered by the [home-price] index – Charlotte, Las Vegas, Seattle and Tampa – hit their lowest index levels in four years, according to Blitzer. Any gains they recorded in recent months have been erased.
The five markets that showed month-over-month gains were led by Phoenix, where prices rose 1.1%. Thirteen markets had declines, with Chicago being the biggest loser at 1.1% down. Miami and Dallas showed no change.
Investors are not impressed, but not disappointed either.
“The furious ride down on home sales and prices is pretty much behind us,” said Stuart Hoffman, chief economist with PNC Financial Services. “I don’t think we’re going up anytime soon. We’ve hit the flat part of the roller coaster ride.”
That 5.3% drop in home-price index over the past year is more than 27% less than a 7.3% decline in October, according to MarketWatch and the index report. “A year ago, home prices had tumbled 18.2%,” said the newswire.
It’s a marked improvement, certainly, but nothing for investors to scream about. In fact, from their peak in 2007, prices in the 20-city index have slipped more than 29%. Home prices are now sitting at late 2003 levels.
The silver lining is that this boosts affordability, and with the government’s tax credit extended through April 30, the beginning of 2010 could see a slight improvement.
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