Prices fell .64% in February, but increased 1.43% compared to a year earlier, according to new Case Shiller data, with the gain representing a significant positive change.

The Case Shiller 10-City Index would fall 7.68% over 12 months if the February fall continued, but the data on the direction of values point in many different directions. Prices for all of 2009 were flat, but have fallen 30% since values peaked in June 2006. The year-over-year increase is a new and positive pattern, but there are many negative trends to consider.

Most analysts for property values (and all assets including stocks) are naturally positive, which calls into question a positive zeitgeist now attached to property values. It is however unambiguously positive that both the 10-City and 20-City index registered a simultaneous annual gain in February — which was last seen in DECEMBER 2006 (more than THREE years ago).

Clouding any and every forecast on property values should be record delinquencies of 15% of all mortgages outstanding, unemployment at just under 10%, and a mortgage market of exceptionally high risk which has been abandoned by all private money sources. About 13.6 million homeowners have no equity or negative equity and therefore have no current wealth to protect by making their mortgage payment. Real estate prices would fall flat on their face without government mortgage money which represents nine of ten new mortgage dollars.

New Observations has previously forecast a fall in values in 2010 of 13 percent based on an average of four major property price indexes. In a separate analysis of a 120-year time series, we forecast a total fall still ahead in the national market of 22% and a total fall from peak-to-trend of 49 percent. Radical government intervention may stop these forecasted falls.

The Case Shiller monthly changes and annual changes for individual cities and for the composite indexes are listed above.

Check Calculated Risk for a good chart of rising and falling property prices and unemployment. Cool charts here on many of the cities covered by Case Shiller. Wall Street Journal on Case Shiller update.

***

PRINT — Prices fell .64% in February, but increased 1.43% compared to a year earlier

Please forward questions, corrections, and reactions to comments below or send me an email. Please send an email if you would like to take out a new mortgage.

mike@mynewmortgage.com

Michael David White is a mortgage broker in Chicago.