Hot off the press (release):

New York, December 30, 2014 – S&P Dow Jones Indices today released the latest results for the S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices. Data released today for October 2014, shows that the pace of home prices across the country continues to decelerate although eight cities did see prices rise faster.
More than 27 years of history for these data series is available, and can be accessed in full by going to www.homeprice.spdji.com. Additional content on the housing market can also be found on S&P Dow Jones Indices’ housing blog: www.housingviews.com.
Year-over-Year
Both the 10-City and 20-City Composites saw year-over-year declines in October compared to September. The 10-City Composite gained 4.4% year-over-year, down from 4.7% in September. The 20-City Composite gained 4.5% year-over-year, compared to 4.8% in September. 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 October 2014 versus 4.8% in September.
Miami and San Francisco saw prices rise 9.5% and 9.1% over the last 12 months. Eight cities, including San Francisco, Denver, and Tampa saw prices rise faster in the year to October than a month earlier. Las Vegas led the declining annual returns with a decrease of -1.2%.

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Chart 2 below shows the index levels for the U.S. National, 10-City and 20-City Composite Indices. As of October 2014, average home prices for the MSAs within the 10-City and 20-City Composites are back to their autumn 2004 levels. Measured from their June/July 2006 peaks, the peak-to-current decline for both Composites is approximately 16-17%. The recovery from the March 2012 lows is 28.5% and 29.3% for the 10-City and 20-City Composites.

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Our usual footnotes apply here:

Main one is that the prices are all on the sales price side.  In reality, if you bought a home in 2006 and think you can get the same for it today, stand by to be depressed:  In reality on the selling side you would eat up to 7% (or more) for inspections, commissions, points, yada, yada.  And then, on top of that there’s the matter of monetary inflation which no one likes to talk about.

But if you were buying loaves of bread, or a new Lexus, look at the purchasing power of $1,000 in 2006 compared to 2014 and you’ll find that $1,171.92 would be needed, or that “same sized house” back in 2006 would have a “today” sales price 15% less than current prices (85.33% of today’s prices to be presact.)

Our best advice?  Buy a modest home, pay it off.  Learn to do your own home remodeling with a Skil saw, plumbing, and electrical goods.  In other words, sweat equity and innovations…

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