The July S&P/Case-Shiller 20 city Home Price Index said prices fell 13.3% y/o/y, less than the expected decline of 14.2%. It is the smallest decline since Feb ’08 and it takes the index to the highest since Jan ’09 as it rose 1.61% m/o/m. At 144.23, it is down 30% from the all time high in July ’06. Seattle and Las Vegas are the only two cities of the 20 that saw a m/o/m drop. Every city still has y/o/y declines led by Las Vegas and Phoenix. This data is not seasonally adjusted and combining the seasonal strong time of the year with the $8,000 first time home tax credit and a moderation in the pace of foreclosures and we have continued stabilization in the home price data. With an expected pick up in foreclosures, continued compression in higher end home prices and the uncertain fate of the tax credit, we’ll see if the improvements in pricing can continue in the face of this. The worst of the financial crisis will end when home prices stop going down and I don’t believe we’ve seen the worst of the price declines in this cycle notwithstanding the recent government induced bounce.
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