Harvey Realty, Inc.

Although still in negative territory, the annual rate of decline of the 10-City and 20-City Composites in the S&P/Case-Shiller Home Price Indices improved for the fourth consecutive month in 2009, according to a report released yesterday by Standard & Poor’s. The 10-City and 20-City Composites declined 16.8 percent and 17.1 percent, respectively, in May compared with the same month last year, compared with annual declines of 18 percent and 18.1 percent, respectively, in April. After 16 consecutive months of record annual declines, beginning in October 2007 and ending in January 2009, the indices have now shown four consecutive months of improvement in annual returns, according to the report.

“The pace of descent in home price values appears to be slowing” said David M. Blitzer, chairman of the Index Committee at Standard & Poor’s. “There is a clear inflection point in the year-over-year data, due to four consecutive months of improved rates of return, after the steep decline that began in the fall of 2005. In addition to the 10-City and 20-City Composites, 17 of the 20 metro areas also saw improvement in their annual returns compared to those of April. Looking at the monthly data, 13 of the 20 metro areas reported positive returns; and the 10-City and 20-City Composites reported positive returns for the first time since the summer of 2006. To put it in perspective, these are the first time we have seen broad increases in home prices in 34 months. This could be an indication that home price declines are finally stabilizing.

“While many indicators are showing signs of life in the U.S. housing market, we should remember that on a year-over-year basis home prices are still down about 17 percent on average across all metro areas, so we likely do have a way to go before we see sustained home price appreciation,” said Blitzer.