Case-Shiller Continues to Record Improvements in Annual Price Changes

The annual rate of change in home prices continues to show improvement, according to ""Standard & Poor's"":http://www.standardandpoors.com.

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Data released Tuesday by the agency show the 20-city composite and 10-city composite readings of the ""S&P/Case-Shiller index"":http://www.standardandpoors.com/indices/sp-case-shiller-home-price-indices/en/us/?indexId=spusa-cashpidff--p-us for August came in below their year-ago levels by 3.8 percent and 3.5 percent, respectively. The previous month, S&P reported a 4.1 percent and 3.7 percent annual decline.

Sixteen of the 20 cities covered by the index posted improved annual returns compared to July’s data. Los Angeles and Miami saw no change, while Atlanta and Las Vegas saw their annual rates of change fall deeper into negative territory.

At -8.5 percent, Minneapolis posted the lowest year-over-year return, but has improved in each of the last three months. Detroit and Washington D.C. were the only two cities to see positive annual returns of +2.7 percent and +0.3 percent, respectively.

The closely watched Case-Shiller index posted a 0.2 percent increase in August versus July for both the 20-city and 10-city measurements, marking the fifth consecutive monthly gain. Ten of the 20 cities in the index saw home prices rise for the month.

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“There was some weakness in the monthly statistics, as 10 of the cities post price declines in August over July,” said David M. Blitzer, chairman of the index committee at S&P Indices. “In the August data, the good news is continued improvement in the annual rates of change in home prices.”

Blitzer went on to explain, “In spring and summer’s seasonally strong period for housing demand, we cautioned that monthly increases in prices had to be paired with improvement in annual rates before anyone could declare that the market might be stabilizing. With 16 of 20 cities and both composites seeing their annual rates of change improve in August, we see a modest glimmer of hope with these data.”

As of August 2011, Blitzer says the crisis low for the 10-city composite was back in April 2009. It was more recent for the 20-city composite â€" the double-dip recorded in March 2011. Both readings are now about 3.9 percent above their cycle lows.

The Midwest is one region that really stands out in terms of recent relative strength, according to Blitzer. Chicago, Detroit, and Minneapolis have all posted very sharp monthly increases going back to May.

Blitzer notes that these markets were some of the weakest markets during the crisis, particularly Detroit.

But as of August 2011, Detroit is the healthiest when viewed on an annual basis. It’s up 2.7 percent versus August 2010. Prices there are still back to their 1995 levels, but Blitzer says the recent pickup in the U.S. auto industry may finally be providing Motor City a much-needed boost.

As seen in S&P’s past few monthly reports, there were large revisions across some of the metropolitan areas included in the study. In particular, Washington D.C. was the most affected in August.