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Case Shiller: Maybe They Just Don’t Like December

Which of the following statements were made today by Standard & Poor’s David Blitzer about the December Case Shiller price indices?

  • “Gains are slowing from month-to-month and the strongest part of the recovery in home values may be over. Year-over-year values for the two monthly Composites weakened and the quarterly National Index barely improved. The seasonally adjusted data also exhibit some softness and loss of momentum.”
  • “The housing recovery is faltering. While prices and sales of existing homes are close to normal, construction and new home sales remain weak. Before the current business cycle, any time housing starts were at their current level of about one million at annual rates, the economy was in a recession”

Actually, both of them were.  Can you guess which quote was an analysis of December 2013 and which was an analysis of December 2014?

The first was 2013.  Despite Blitzer’s warnings, Case Shiller indices went on to record annual gain ranging from 4.3 to 4.7 percent in 2014—not bad and second only to the breakout year in 2013 which broke Case Shiller’s price peaks.

The second quote came out today about December 14 prices.  The recovery is “faltering,” argued Blitzer, because new home sales and construction remains weak.  That’s surely a cause for concern in the home building and new homes sector which accounts for about 15 percent of home sales— including the handful of publicly held companies that Standard & Poor’s covers.  For the millions of potential home sellers and buyers getting ready for the spring season the pace of new home construction is no reason to lose sleep—but more than one media outlet saw “Case Shiller” and “recovery is faltering” and raised the alarm.  A self-fulfilling prophecy, perhaps?

Here’s what the latest Case Shiller data said without the spin.

Data released today for December 2014 shows a slight uptick in home prices across the country. Nine cities reported monthly increases in prices.


Both the 10-City and 20-City Composites saw year-over-year increases in December compared to November. The 10-City Composite gained 4.3% year-over-year, up from 4.2% in November. The 20-City Composite gained 4.5% year-over-year, compared to a 4.3% increase in November. 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 December 2014 versus 4.7% in November.

The fastest year-over-year gains were in San Francisco and Miami, where prices rose 9.3% and 8.4% over the last 12 months. Twelve cities, including Cleveland, Denver, and Seattle, saw prices rise faster in the year to December than a month earlier. Las Vegas led the declining annual returns with 6.9%, down from 7.7% annually.


The National index was slightly negative in December, while both composite Indices were positive. Both the 10- and 20-City Composites reported slight increases of 0.1%, while the National Index posted a -0.1% change for the month. Miami and Denver led all cities in December with increases of 0.7% and 0.5% respectively. Chicago and Cleveland offset those gains by reporting decreases of -0.9% and -0.5% respectively.

December recorded mixed monthly figures. Nine cities recorded higher monthly figures, and six posted decreases. Five cities reported relatively flat monthly changes for December. Miami had the largest increase of all 20 cities at 0.7% month-over-month.


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