Housing rebound continues to erode

The S&P/Case Shiller home price index indicates that the government-sponsored housing rebound is over.

Mario Anzuoni/Reuters/File
A house is seen put up for sale in Los Angeles in this file picture taken February 24. The home price rebound seems to have ended, according to the latest Case Shiller index, which in February, fell for the fifth month in a row.

Today’s release of the S&P/Case-Shiller (CSI) home price indices for February 2010 (browse the dashboard) reported that the non-seasonally adjusted Composite-10 price index declined 0.64% since January further indicating that the government sponsored housing bounce seen last year continues to erode.

On a year-over-year basis though, the Composite-10 index now shows the first increase in 38 consecutive months, a notable development.

Looking at the 1990s-era comparison charts below you can see that it took roughly 2 times longer (roughly 40 months) for our current housing decline to show its first year-over-year gain than was seen during the 1990s decline.

If the 1990s remains a good model, this would imply that we have roughly another 40 months (3.3 years) left to go until we hit the ultimate price bottom.

Further, the 1990s decline took roughly 100 months (8.3 years) to go from peak to peak (i.e. peak to trough and back to full recovery again) so again, using the 1990s as a model would imply that our current decline will run a total of roughly 200 months (16.6 years) from peak to full recovery.

This means that current holders of peak priced homes may have to wait until some time in 2023 to be made whole again.

Alternatively, if we are currently experiencing the Japanese model for residential real estate deflation… the ultimate recovery may still be many decades out.

The 10-city composite index increased 1.43% as compared to February 2009 while the 20-city composite declined 0.64% over the same period.

Topping the list of regional peak decliners was Las Vegas at -55.96%, Phoenix at -51.58%, Miami at -47.48%, Detroit at -44.51% and Tampa at -42.65%.

Additionally, both of the broad composite indices show significant peak declines slumping -30.70% for the 10-city national index and -30.26% for the 20-city national index on a peak comparison basis.

To better visualize today’s results use to view the full release.

Also, follow the S&P/Case-Shiller dashboard.

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