Tuesday, May 26, 2009

Case-Shiller: House Prices Tracking More Adverse Scenario

by Bill McBride on 5/26/2009 09:33:00 AM

Please see: Case-Shiller: Prices Fall Sharply in March for the seasonally adjusted composite indices.

The first graph compares the Case-Shiller Composite 10 NSA index with the Stress Test scenarios from the Treasury (stress test data is estimated from quarterly forecasts).

Case-Shiller Stress Test Comparison Click on graph for larger image in new window.

The Stress Test scenarios use the Composite 10 index and start in December. Here are the numbers:

Case-Shiller Composite 10 Index, March: 151.41

Stress Test Baseline Scenario, March: 154.82

Stress Test More Adverse Scenario, March: 149.96

It has only been three months, but prices are tracking close to the 'More Adverse' scenario so far.

The second graph shows the price declines from the peak for each city included in S&P/Case-Shiller indices.

Case-Shiller Price Declines In Phoenix, house prices have declined 53% from the peak. At the other end of the spectrum, prices in Charlotte and Dallas are off about 11% to 12% from the peak. Prices have declined by double digits everywhere.

Prices fell sharply in most Case-Shiller cities in March, with Minneapolis off 6.1% for the month alone. Denver, Dallas, and Charlotte showed small price gains.

I'll have more on price-to-rent and price-to-income using the National Index soon.

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