RealEstateEconomyWatch.com

All three Case-Shiller price indices ended 2011 at new lows since the housing crisis began in mid-2006, wiping out all price gains achieved since 2002.

The Case-Shiller national composite fell by 3.8 percent during the fourth quarter of 2011 and was down 4.0 percent versus the fourth quarter of 2010. Both the 10- and 20-city composites fell by 1.1′percent in December over November, and posted annual returns of -3.9 percent and -4.0 percent versus December 2010, respectively. These are worse than the -3.8 percent respective annual rates both reported for November.

In addition, 18 of the 20 MSAs saw monthly declines in December over November. Only Miami and Phoenix were up, 0.2 percent and 0.8 percent, respectively. At -12.8 percent Atlanta continued to post the lowest annual return. Detroit was the only city to post a positive annual return, +0.5 percent in December versus the same month in 2010. In addition to the three composites, Atlanta, Las Vegas, Seattle and Tampa each saw average home prices hit new lows.

The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 4.0 percent decline in the fourth quarter of 2011 over the fourth quarter of 2010. In December, the 10- and 20-city composites posted annual rates of decline of 3.9 percent and 4.0 percent, respectively.

“In terms of prices, the housing market ended 2011 on a very disappointing note,” said David M. Blitzer, Chairman of the Index Committee at S&P Indices. “With this month’s report we saw all three composite hit new record lows. While we thought we saw some signs of stabilization in the middle of 2011, it appears that neither the economy nor consumer confidence was strong enough to move the market in a positive direction as the year ended.

“After a prior three years of accelerated decline, the past two years has been a story of a housing market that is bottoming out but has not yet stabilized. Up until today’s report we had believed the crisis lows for the composites were behind us, with the 10-city composite originally hitting a low in April 2009 and the 20-city composite in March 2011. Now it looks like neither was the case, as both hit new record lows in December 2011. The national composite fell by 3.8percent in the fourth quarter alone, and is down 33.8percent from its 2nd quarter 2006 peak. It also recorded a new record low.

“In general, most of the regions also posted weak data in December. Eighteen of the cities saw average home prices fall in December over November. Seventeen of the cities have seen monthly declines for at least three consecutive months. In addition to both monthly composites, 10 of the cities saw home prices fall by more than 1.0percent during the month of December. The pick-up in the economy has simply not been strong enough to keep home prices stabilized. If anything it looks like we might have reentered a period of decline as we begin 2012.”

As of the fourth quarter of 2011, average home prices across the United States are back at their late 2002 levels. With this month’s report, the National Index level hit a new low, falling 3.8 percent over the 4th quarter and down 4.0 percent versus the fourth quarter of 2010. Measured from their June/July 2006 peaks through December 2011, the peak-to-current decline for both the 10-city composite and 20-city composite is -33.8percent; the same as the national composite.

In December 2011, Miami and Phoenix were the only two MSAs that posted monthly gains, +0.2 percent and +0.8 percent, respectively. Both the 10-city and 20-city composites were down 1.1percent, from their November 2011 levels. Atlanta, Cleveland, Detroit and Las Vegas were the four cities where average home prices were below their January 2000 levels. With an index level of 101.91 Phoenix is not far behind.