Home Prices See Biggest Monthly Drop Since Polar Vortex As Case-Shiller Declines For Second Month

Tyler Durden's picture

Case-Shiller's 20-city home price index dropped 0.1% MoM in October (on an unadjusted basis) - the second monthly drop in a row and biggest drop since the Polar Vortex. Year-over-year, home prices rose 4.5% - the weakest growth since October 2012. While this modestly beat expectations (+4.5% vs +4.4% exp.), it is the 11th month in a row of growth deceleration. Also of note: the Top 20 Composite index is now down for the second month in a row, dropping to 173.36. The question now is whether the downside momentum will pick up.

Worst annual gain since Oct 2012 and weaker 11 months in a row:


and the biggest monthly drop since The Polar Vortex:


Some more charts, showing the ongoing - and accelerating - slowdown.

Sequential change:

And Year over Year:

And from the report:


Both the 10-City and 20-City Composites saw year-over-year declines in October compared to September. The 10-City Composite gained 4.4% year-over-year, down from 4.7% in September. The 20-City Composite gained 4.5% year-over-year, compared to 4.8% in September. The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 4.6% annual gain in October 2014 versus 4.8% in September.

Miami and San Francisco saw prices rise 9.5% and 9.1% over the last 12 months. Eight cities, including San Francisco, Denver, and Tampa saw prices rise faster in the year to October than a month earlier. Las Vegas led the declining annual returns with a decrease of -1.2%.


The National and Composite Indices were both slightly negative in October. Both the 10 and 20-City Composites reported a slight downturn, -0.1%, while the National Index posted a -0.2% change for the month. San Francisco and Tampa led all cities in October with increases of 0.8%. Chicago and Cleveland offset those gains by reporting decreases of -1.0% and -0.7% respectively.

October recorded mixed monthly figures. Ten cities recorded lower monthly figures while eight posted increases. Detroit and San Diego both reported flat monthly changes. San Francisco had the largest increase of all 20 cities at 0.8% month-over-month.
“After a long period when home prices rose, but at a slower pace with each passing month, we are seeing hints that prices could end 2014 on a strong note and accelerate into 2015,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Two months ago, all 20 cities were experiencing weakening annual price increases., Last month, 18 experienced weakness. This time, 12 cities had weaker annual price growth, but eight saw the pace of price gains pick up. Seasonally adjusted, all 20 cities had higher prices than a month ago.

“Most national economic statistics, other than those connected to housing, posted positive reports in November and early December. Third quarter GDP was revised to 5% real growth at annual rates, and unemployment was at 5.8% as payrolls added over 300,000 jobs in November. Housing was somber: housing starts pulled back 1.6%, existing home sales were at 4.93 million, down 6.1%, and new home sales were 438,000, down 1.6%, all in November.

Finally, the breakdown for housing:

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monopoly's picture

And watch consumer sentiment be off the charts. Everything is just so wonderful in Amerika!

Headbanger's picture

There's never been a better time to buy a home...

Duh duh duh...

Creepy A. Cracker's picture

It must be.  The liberal "news" media is insisting that the over 5% GDP growth last quarter is proof (IT CAN NOT AND MUST NOT BE DISCUSSED) that the Dear Leader Obama "recovery" is going strong.  So what if the increased spending was on health care due to the nightmare known as Obamacare, that more and more people are dropping out of the work force because they can't find jobs, that more people are now working part time due to the nightmare known as Obamacare, that middle class incomes are falling, that the number of people on welfare has skyrocketed, that food stamps have skyrocketed.  None of that matters.  It's a recovery!

kaiserhoff's picture

Insightful comment.

One of the real sleepers of Scumbamadontcare, is that 10 million more people signed up for medicaid.  Good for the saw bones.  Death on the states and taxpayers

Creepy A. Cracker's picture

Good point.  Although medicaid reimbursements are more or less at the break even point for most doctors.  Many don't take it becasue the reimbursement is less than their costs.  It's hard to make a living when you get paid less than your costs.  We will soon be importing our "doctors" from Kenya becasue they will be willing to take $15/hour for their eight years of medical training "expertise."  Welcome to government run health care...

madcows's picture

I flipped past Face the Nation the other day.  The nitwit, leg humper, obamaHost (Chuck Stooge) was setting the stage for the panel's discussion:  "why isn't Obama getting credit for the 'Recovery' as all economic indicators are on the rise?"  He hit the big ones:  UE rate, GDP, Consumer Confidence, etc...

What utter nonsense.  One of the BLACK panelists actually had the gall to say that the unemployment rate wasn't a fair representation of the labor market given that the Labor Participation Rate is at historic lows.

I nearly fell out of my seat.

jubber's picture

CNBC obviously cheerleading these figures

symtex411's picture

first cheaper oil, now cheaper houses, what's next to alleviate the consumers pocket books... cheaper stocks?

NoDebt's picture

Let's not go overboard.  That's just crazy talk.

new game's picture

4.5 percent of _____. ok i am getting fucking rich again! time to buy a truck mon. a fuckin truck, brand new, baby and gas is sooooo loooooowwww...

buzzsaw99's picture

worst gain, lulz

j0nx's picture

DC area flat as can be. Terrible RE market here right now. Little decent inventory available and prices going nowhere on homes that should be lowered.

Creepy A. Cracker's picture

Take a look at the foreclosures and "pre-foreclosures" on Zillow.  A whole lot o them...

kaiserhoff's picture

Inventory is piling up along the Blue Ridge too.  All the Real Estate ladies are crying.

Foreclosures are back, not many, but enough that most of us aren't really interested in anything else.


Fed-up with being Sick and Tired's picture

We have had a bare piece of land near Lake Almanor, CA for over 3 years, price drops continuously, in a nice neighborhood, utilities at curb, etc.  IT SITS.

Creepy A. Cracker's picture

You would have been better off with a piece of bear land.

Fed-up with being Sick and Tired's picture

We have had a bare piece of land near Lake Almanor, CA for over 3 years, price drops continuously, in a nice neighborhood, utilities at curb, etc.  IT SITS.

Max Cynical's picture

"dropped 0.1% MoM in October" and this is the headline "Home Prices See Biggest Monthly Drop Since Polar Vortex"?

A .1% monthly drop in housing is imperceptable. Sensational headline for what amounts to a rounding error.

NoDebt's picture

That's a thousand dollars off the price of your million dollar mansion, mister!

new game's picture

call it the doom agenda, ha...

Fed-up with being Sick and Tired's picture

One must read the details not the headline here.  That's OK, at least we are getting the other side of the argument.   MOST importantly, and not mentioned:  CRUDE HY BONDS are the kicker:  defaults, and off we go again.

Fed-up with being Sick and Tired's picture

One must read the details not the headline here.  That's OK, at least we are getting the other side of the argument.   MOST importantly, and not mentioned:  CRUDE HY BONDS are the kicker:  defaults, and off we go again.

i_call_you_my_base's picture

Absent fed intervention, housing is about to roll over.

j0nx's picture

Riiiight. Been hearing that tired line for 3 years now and I'm still renting and waiting and waiting for that...Bueller, bueller...

i_call_you_my_base's picture

Right, and I guess your argument is that half a trillion in MBS purchases per year from the fed had / has no impact?

Stormtrooper's picture

Right, and they keep promising me $700-800 gold before it is all gone. Where is my $800 gold?

j0nx's picture

I'm not making an argument. Only offering my assessment of the local RE market. Flatlined prices when they should be decreasing. Shitbird hovels for $350-400k that aren't selling after 3-6 months and the sellers aren't budging on price. Just offering my opinion on what I see locally since I've been actively ready and waiting for prices to drop so we can buy for over a year now. Take it as you will.

kaiserhoff's picture

Yup.  I see 10-15 year old poorly built mistakes, listed for $100,000 ABOVE current building costs, and a few million acres of land within easy commute.


Shaznardickleze the Doon's picture

On a long enough timeline shitbird hovels drop to fair value.

MalteseFalcon's picture

Maybe you should dive in.

Fed-up with being Sick and Tired's picture

My wife and I are out of RE for good!    This is not your Grandpa's RE market, when it comes to buy and hold.   We bought our first home in 1984, then another in 1987, then another in 1992 and sold that last one in 2009, and made maybe 15% on my money...lucky!


We are now in our early 60's, SHOULD be most standards, already be in our "LAST HOME" and instead:  we are renters now.  So, we rent in Southern Cal (Arroyo Grande - -winters)  Newport, OR (Summers) and the EU every other winter.....and I am saving a ton, only trade OPTIONS now using Measured Moves (I have an FB page) and I am an expert at selling OTM PUTS on the SPX and IWM....enough to pay the bills, nothing fancy and we are having a ball.

q99x2's picture

It's cold out and getting colder. Pittsburgh sucks being this cold without snow. It is the perfect habitat for zombies. They have their own dialect here. It comes from the descendants of chemically polluted habitats. Twists up the tongue so to speak, especially in the cold.


NoVa's picture

I like Pittsburrr

video - Dat Tru



Seasmoke's picture

Roll those charts back to 1997. Let's start there , where the ponzi pyramid housing bubble began. 

Thalamus's picture

I hate debt, without it most of us could eventually have our houses paid off, but instead we bid up prices and enslave ourselves for life.  Look for the anti-christ to be a banker.     

Spungo's picture

Housing is extremely cyclical, so this is expected. Who the fuck buys a house in winter?
Speaking of which, you should buy stuff in winter. Almost everything is cheaper in winter. People don't go car shopping in January.

alexmark2013's picture
It’s Official: Fed’s Handiwork Meets Bitter Reality, Inflated Home Prices Strangle US Housing Market http://investmentwatchblog.com/its-official-feds-handiwork-meets-bitter-reality-inflated-home-prices-strangle-us-housing-market/
tarsubil's picture

Yeap, generally, prices are up since the heroin kicked in in 2009. Sales are down since no one is willing or able to afford these high prices.

blown income's picture

Houston and Lafayette La should be on that list...



Zillow which to me is crap shows price lowered week of Christmas from $265 a foot...not waterfront, no beach , no park or woods to speak of, no mountains...nothing ...Fuck that. Not even worth half that price...



Must have smoked too much oil or something....doesn't even have bathtubs....

NEOSERF's picture

Never fear, today Fannie and Freddie start accepting 3% down applications from the "I had 3 DUI convictions but now I drive a Chevy" crowd.

madcows's picture

Still not affordable.

scrappy's picture

Just like oil. Just like stocks.

Pumped up by fiat,

Not a free market.

Nature will win in the end.

We should have taken our licks in 2008.

It will be very harsh medicine when it comes.

slightlyskeptical's picture

Absent everything else house prices should rise in line with inflation. They actually rose a little faster than inflation over the last year. I fail to see the problem in the numbers. The tone of the article does not match it's content.

MisterMousePotato's picture

"Absent everything else house prices should rise in line with inflation?"

Or: "Absent everything else house prices should rise in line with [wage] inflation."

Fed-up with being Sick and Tired's picture

Housing, bought when you are in your late 20's, and affordable in a downturn, can return your cash plus 15-20% normally.  I was actively involved in Commercial RE in my 30-40's, apartment buildings.  TAX codes offered us triple those returns in Tax Exempt exchanges, but not nearly as dangerous as we have multiple unit, 100+ apartment types of investments.  TODAY, those apartments, which I sold out of in my late 50's, are worth ten times what I paid.  SO, if there was any RE to invest in, would be during a hopeful crash similar to 2007-09.  BUY CHEAP, buy when sellers are under water.

Fed-up with being Sick and Tired's picture

...in other words, NEVER OWN A HOME, rent one of your apartments (even pay it) and what we did was turn 4 of the apartments, across a hallway, into a massive PENTHOUSE for pennies...it was VERY Cheap, and I did not collect rent payments as I had a manager at the other end, a retired guy who was a cop and a bird dog!   He NEVER hesitated one moment with late payments, and zero tolerance and we got rid of deadbeats pronto..as a result, we were 82% to 87% occupied, and most of the time the worst part were tattered carpets, holes in doors and dirt essentially.  We had a fulltime pair who took care of that and we bought bulk sheetrock, paint, carpet and so on.  We always replaced 4 year old equipment, such as REFERS with more efficient appliances, and metered each apartment separately. Ultimately, we had 5 straight stable years with nearly 99% occupancy.  MY POINT:  pool your money in rentals but only multiple units!

FecundaGoat's picture

You have to be a fool not to understand the tax advantages of owning and renting real estate.  I have amassed a fortune in the last 15 years and have retired early.  Good luck renting....You are paying my bills and making me rich!!