S&P Home Prices Continued Gains in December

By:: Kirk Haverkamp | February 23, 2010

U.S. home prices posted a slight increase in December, continuing a trend of seven months of gains, according to the newly released Standard & Poor’s/Case-Shiller home price index.

Prices were up a seasonally adjusted 0.3 percent in December, identical to November’s gains and exceeding economists’ expectations. The annual rate of decline in the survey of 20 major metropolitan areas continued to improve as well, with prices down 3.1 percent compared to December 2008.

The annual rate of decline, which is generally considered indicative of long-term trends, shrank every month in 2009, although it has yet to show annual gains since before the economic downturn. The 3.1 percent decline is the survey’s smallest annual rate of decline since May 2007.

“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,” said David Blitzer, chairman of S&P’s index committee. “However, the rate of improvement seen during the summer of 2009 has not been sustained.”

Prices on a non-seasonally adjusted basis fell 0.2 percent in December; the seasonally adjusted figures are meant to account for softness in the housing market that typically occurs around the holiday season. Only four cities in the index posted absolute price gains in December; Los Angeles, Phoenix, San Diego and Las Vegas. Those cities have all been among the nation’s hardest-hit housing markets over the last three years.

Unadjusted monthly prices declined in 15 of the other 16 metropolitan areas surveyed, with Chicago posting the biggest decline at 1.6 percent.

Overall, U.S. home prices are down 29 percent from the peak of the market in 2006 and are now roughly at the same point they were in the summer of 2003.

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