Case-Shiller Index: Twin Cities Declines by 18.4% – December 2008
I have been remiss in publishing the latest report from Case-Shiller. It was released on February 24, 2009 for the period ending December 2008. All of us know that December and January are particularly difficult months for Minnesota real estate. If you recall, this past December was the start of our first “real” winter in the Twin Cities in about five years. It seemed to snow every other day for the entire month. That then led in to January which was one of the coldest January’s on record so I suspect next month’s data will not be much prettier than December.
It doesn’t get much uglier than what Case-Shiller printed for the Twin Cities December data. The Case-Shiller reports a year over year number as well as a back to back (month to month) comparison. The December data that shows we are down 18.4% compared to one year ago, also shows that we had a monthly decline of 4.6%. That’s an annualized decline of 55.2% which would be a total disaster. One month does not make a year. Typically we’ve seen our month to month declines ranging from 1-2%. December had to be an anomy. That said, home prices have not yet found a bottom in the Twin Cities – at least through December 2008.
For December 2008, the Twin Cities could be lumped in with the worst markets in the country in terms of price declines for November to December. Those cities were:
- Phoenix: -5.1%
- Las Vegas: – 4.8%
- Minneapolis: – 4.6%
Ouch.
Below are the data tables from the Case-Shiller Index report published February 24, 2009. This one is the 10 City Composite vs. the broader 20 City Composite. (Click on picture to enlarge in a new window).
Home Prices Averages and Percentage Declines: (Click picture to enlarge in a new window).
December 2008 20 City Data Table (Click on picture to enlarge in a new window).
Graphical display for the past year of all 20 cities studied in the Case-Shiller Index. Note that the Twin Cities is showing a decline of 18.4% whereas the overall 20 City Composite Index is showing a decline of 18.5%. Typically we had been tracking a few percentage points better than the 20 City Composite. Now we are even. Based upon the activity in the past 4-5 months, the Twin Cities has been lagging the index – i.e. we are performing worse than many of the rest of the cities. This very well could be a seasonal trend because we tend to take a bigger hit than many cities during the winter time. (Click on picture to enlarge in a new window).
Twin Cities versue the 20 City Composite Index. (Click on picture to enlarge in a new window).
I will publish information from the Minneapolis Area Association of Realtors in a separate entry. They are continuing to show that pending sales activity are running 15-20% over last year at this time and overall listing inventory is down 10+%. Those are good trends in order for this market to hope to get back in to balance.
