U.S. Home Prices Weaken Further as Six Cities Make New Lows - According to the S&P/Case-Shiller Home Price Indices

Here is the latest (October) S&P Case-Shiller market report. It shows that the national real estate market as a whole has seen declining home values over the past 90 days. That is not surprising coming off the end of the Tax Credit boost. They do reference the potential beginning of a "double dip" decline at a national level, since the country hit bottom in 2008, bounced up in 2009/2010 and is falling back again, in terms of values and increasing inventories. Rather than a Double Dip, what we are seeing and will continue to see is a recovery that will be "bouncing off the bottom" for quite some time, with each bounce down not as bad as the last. It will be tough to follow this "bouncing ball" recovery through the media, since each decline will be met with predictions of disaster and each bounce up, predictions of great recoveries. It will be neither, just the slow progress of a housing recovery based on a slow economic engine. We are definitely in the perfect Buy Zone and have been for two years and will continue for the next year or more as well. So for Buyers, keep focused on the long term value of homeownership and buy when you find the right home, otherwise the day to day market noise will drive you crazy.

The Detroit real estate market showed a decline as well in Oct vs. Sept, which we also confirmed in our MLS numbers, based on closed sales (also true for the rest of the state as well). But what the Index does not show is that Pending sale values have stabilized (the most current market data) and our home inventories, different from other cities, are down significantly, giving us a better base to manage the "bouncing" than most of other cities/states. Detroit's value index is the lowest of the cities in the composite, meaning our values have fallen the most (69% of 2000 values vs Los Angeles at 170%) but our economy is not proportionally that much worse than say California, meaning our affordable values are drawing proportionally more home buyers into the market which helps explain our improving activity compared to many others (for every basket of lemons there is always some lemonade!).
This does mean however that since lenders do watch the CS Index, appraisal standards will remain tight until the lenders can see a consistent appreciation trend.
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