Case-Shiller home prices officially double-dipped in the March data, reported this morning. This was not a great surprise considering we saw the Corelogic HPI double-dip in January. The Case-Shiller 20-city NSA series fell -0.77% in March versus February and -3.6% versus a year ago. The MoM change was slightly better than February, which is to be expected given the seasonal pattern - home prices are generally stronger in the spring (March through June).
13 of the 20 cities hit new lows in March. Home prices have been strongest in the highest-value markets, particularly D.C., New York, and Los Angeles.
We've noted for several months an increasing divergence between the Corelogic HPI and the Case-Shiller HPI. These series are not identical in scope and methodology, but the differences between them don't immediately explain the growing gap.
Based on our demand model, we expect 18% downside in home prices in 2011 versus 2010.
The charts below show the MoM and YoY change in Case-Shiller by city on an NSA basis. 18 of the 20 cities (all except D.C. and Seattle) moved lower MoM. Looking at the YoY, D.C. was the only gainer.
We show below that the higher-priced cities are also seeing better performance MoM and YoY.
The chart below shows the Case-Shiller 20-city NSA index with YoY and MoM changes.
As noted, home prices have a seasonal component, showing stronger performance in April, May, and June.
Joshua Steiner, CFA