In its release last week, The S&P Case-Shiller Index, a leading indicator of home value in 20 major metropolitan markets across the US, showed a 2.5 percent decline in home value over the fourth quarter of 2009 versus the same period in 2008.  While the index remains negative, the numbers are seen as an improvement over the intense declines experienced over the first three quarters of 2009, each in the double digits. It is estimated that average home prices across the United States are now at similar levels to what they were in the summer of 2003 before the housing boom.

Four of the 20 cities did show a positive gain in home value including Las Vegas, Los Angeles, Phoenix and San Diego. These cities were also the hardest hit by the housing crash and are responsible for the bulk of foreclosures across the country.  Only three cities – Detroit, Las Vegas and Tampa – still showed double digit annual rates of decline as of the end of 2009.

The first few months of the year are typically slow for home sales activity, which is expected to pick up in early spring and continue throughout the summer months. Demand for homes in the fourth quarter of 2009 was partially attributed to buyers believing the home buyer tax credit would run out, but that program was subsequently renewed until April 30, 2010.  The credit is under review again now as talks have intensified over whether to extend the program even further.

For more analysis on the latest Case-Shiller report, check out this post by LendingTree Chief Economist Cameron Findlay.

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