Home prices in the United States fell 8.9% in 2007, the biggest decline in more than 20 years, the Standard & Poor's Case-Shiller Index announced Tuesday.Further, prices fell an alarming 5.4% in Q4 2007, the survey indicated. Prices fell in 2007 in 17 of 20 cities surveyed, officials said.
Meanwhile, the 20-city index plunged 9.1% for 2007, and the 10-city index plummeted 9.8% for the year.
Somber data
Robert J. Shiller, Professor at Yale University and study co-author said:
We reached a somber year-end for the housing market in 2007. Home prices across the nation and in most metro areas are significantly lower than where they were a year ago. Wherever you look things look bleak, with 17 of the 20 metro areas reporting annual declines and the remaining three reporting flat or moderate growth rates. Looking closely at these negative returns, you will see that 14 of the metro areas are also reporting record lows and eight are in double digit decline. The monthly data paint a similar picture, with all metro areas now reporting at least four consecutive negative monthly returns.
Further, the depth of the 2007 housing price decline underscores the housing sector's poor condition. During the 1990-91 housing recession, the annual rate bottomed at a 2.8% price decline.
Miami remains the weakest market, reporting a double-digit annual decline of 17.5%, followed by Las Vegas and Phoenix at 15.3% each. In December, San Francisco slipped into negative double-digit territory with an annual return of -10.8%. Charlotte, Portland and Seattle are the only three cities still experiencing positive annual growth rates; however, Seattle came in at only +0.5%, an almost flat growth rate.
Concerning prices in major U.S. cities in 2007, New York declined 5.6%, Los Angeles plunged 15.7, Chicago fell 4.5%, Washington fell 9.4%, and Denver fell 4.5%.
Housing slump: far from over
Economist Steve Affinito told BloggingStocks Tuesday the Case-Shiller report indicates the housing slump is far from over.
"We have a deepening housing slump, no question, and we're not at the bottom yet. Prices fell 5.4% just in Q4 2007, which is troubling," Affinito said. "When you combine the Case data with inventory data showing a 10-month supply, it paints a picture of a stagnant home market, one where prices really have to fall further to attract buyers."
Based on the above dat,a Affinito said he does not expect the housing market to show signs of recovery until Q4 2007, at the earliest.
"We can basically eliminate housing as a source of economic stimulation in 2007, obviously," Affinito said. "If we catch any breaks, we may begin to see some sign of a housing bottom in Q4 2007, but that this juncture, even that looks doubtful."
Miami remains the weakest market, reporting a double-digit annual decline of 17.5%, followed by Las Vegas and Phoenix at 15.3% each. In December, San Francisco slipped into negative double-digit territory with an annual return of -10.8%. Charlotte, Portland and Seattle are the only three cities still experiencing positive annual growth rates; however, Seattle came in at only +0.5%, an almost flat growth rate.
Concerning prices in major U.S. cities in 2007, New York declined 5.6%, Los Angeles plunged 15.7, Chicago fell 4.5%, Washington fell 9.4%, and Denver fell 4.5%.
Housing slump: far from over
Economist Steve Affinito told BloggingStocks Tuesday the Case-Shiller report indicates the housing slump is far from over.
"We have a deepening housing slump, no question, and we're not at the bottom yet. Prices fell 5.4% just in Q4 2007, which is troubling," Affinito said. "When you combine the Case data with inventory data showing a 10-month supply, it paints a picture of a stagnant home market, one where prices really have to fall further to attract buyers."
Based on the above dat,a Affinito said he does not expect the housing market to show signs of recovery until Q4 2007, at the earliest.
"We can basically eliminate housing as a source of economic stimulation in 2007, obviously," Affinito said. "If we catch any breaks, we may begin to see some sign of a housing bottom in Q4 2007, but that this juncture, even that looks doubtful."
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Reader Comments (Page 1 of 1)
2-26-2008 @ 11:19AM
william lindblad said...
Why is everyone so upset over a small percentage decline? Not a soul cared when the INCREASE took place. That is the whole problem. Historically, the real estate market has had ups and downs and normally adjusts to economic conditions, but the period between 1996-2006 was based upon fantasy. In this time frame most markets tripled in value, yet there was nothing in the general economy to support this. Considering that this anamoly was country wide there should have been a valid reason, but in fact it was created by lenders giving false hopes to foolish buyers and speculators trying to cash in on the frenzy. This small decrease is nothing. Pprices have to fall a great deal more to get back in line with the general economy or this cycle will simply repeat. This is going to be a painful process and it is doubtful that even government intervention can do little more than mitigate. Deafult is not confined to housing and is beginning to show in credit cards and auto loans. The lenders themselves are in trouble with structured debt packages, write-downs and liquidity problems and there is much more that remains unknown. Corporate bond insurance is un-regulated along with many other types of securities. To date, some private pension funds have been hit. What is out there in debt packages???
Another consideration is municipal and county revenue and they are all going to come up short. All logic states that a recession is well under way.