Home prices fell again in October, with the result that RE Metrics’ estimate for October home prices (US 10-City Index) is negative 0.2%, a shallower drop than the 0.4% monthly decrease in September. According to RE Metrics’ model, prices declined in eight of the ten metros during October. The largest month-to-month declines were in San Diego and Denver (-0.5%), and San Francisco (-0.4%). New York and Washington, DC were the only metros with positive growth, posting 0.2% and 0.1% monthly increases, respectively. Las Vegas ranked third with a 0.1% monthly decline.
Most metros experienced shallower (less negative) drops in October compared to September. Eight of the metros saw a relative improvement in the rate of change, while 2 metros weakened relative to September. The largest month-to-month relative improvements in the rate of change occurred in Los Angeles (change from -0.9% to -0.3%, a 0.6% improvement), San Francisco (change from -0.9% to -0.4%, a 0.5% improvement) and San Diego (change from -0.9% to -0.5%, a 0.4% improvement). The two weakening metros were Las Vegas (which shifted from +0.1% in September to -0.1% in October) and Chicago (which shifted from 0% in September to -0.2% in October).
(Note: the major metro areas covered here are the 10 components of the S&P CoreLogic Case-Shiller 10-City Composite Home Price Index. October results are due to be published on December 31st.)
Review of September Predictions
The predicted growth rates for September performed well overall. For the 10-city composite index, the forecast was within 9 basis points of the actual (predicted -0.512% vs. actual -0.419%). At the metro area level, the forecasted growth rates were within 0.1% of the actual result for 8 of the 10 metro areas. The widest spreads between predicted and actual were in Las Vegas (-0.6% spread) and San Diego (-0.2% spread). See the chart below for comparisons for each metro and the 10-City Composite Home Price Index.
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