Home prices plunge 17.4% in the past year, Case-Shiller says

Posted Nov 25th 2008 10:07AM by Joseph Lazzaro
Filed under: Forecasts, Bad News, Economic Data, Housing, Recession

The plunge in U.S. home values continues. Home prices in the United States in 20 cities declined at the fastest pace ever, as foreclosures increased and banks sought to unload homes by selling at cut-rate prices.

Home prices in a 20-city sample plunged a record 17.4% in September, on a year-over-year basis in, according to the S&P / Case-Shiller U.S. National Home Price survey (pdf). The index has fallen every month since January 2007. Home prices fell 16.6% in August, on a year-over-year basis.

Further, prices in a 10-city survey also plummeted a record, 18.6%, on a year-over-year basis.

Economists surveyed by Bloomberg News had expected home prices in the Case-Shiller survey to decline 16.0-17.2% in September on a year-over-year basis.

The areas with the largest annual percentage declines were: Phoenix, -31-9%, Las Vegas, -31.3%, San Francisco, -29.5%, Miami, 28.4%, Los Angeles, -27.6%, and San Diego, -26.3%.

Not one Top 20 metro area experienced a year-over-year increase in home values, as of September. The two that fared the best, Dallas and Charlotte, N.C., declined just -2.7% and -3.5%, respectively.

Economist Peter Dawson tried to be as diplomatic as possible about the year-over-year price data. "It was a little bigger decline than expected, but nothing unusually surprising," Dawson said. "Unfortunately, we're becoming accustomed to large year-over-year declines in housing, in good measure driven by cut-price foreclosure sales. We will be fortunate if we see a bottom in prices in 2009, but right now that isn't likely."

Year-over-year percentage price changes in other major U.S. cities were as follows: New York, -7.3%, Chicago, -10.1%, Boston, -5.7%, Washington, D.C., -17.2%, Denver, -5.4%, and Seattle, -9.8%.

Housing Sector / Economic Analysis: Yet another horrible U.S. housing sector statistic, and the sector remains in deep recession. Economists almost universally agree that the U.S. housing sector is far from bottoming: some see a recovery starting early in Q3/Q4 2009, while others say it won't start until Q1 2010, at the earliest.
Hence, the sooner the U.S. Treasury implements the FDIC's model refinance program, the better: it's a key factor in not only shutting-off the toxic asset pipeline, but also ending home price declines.

Tags: Case-Shiller, featured, home prices, housing

Print this

Reader Comments (Page 1 of 1)

11-25-2008 @ 10:21AM

BHarrison said...

As burdensome as it might be, American will be able to pay the "taxes" that are being set up.

The 'SHOCKER" will be when the home market drops below the mortgage amount. Then if homeowners have to sell their homes for any reason, they will have to come up with the cash difference at the "closing". Now that is going to be a "toughie" . . . these things take time to work out. And realestate is not expected to appreciate for 2 or 3 years; and purportedly will NEVER be as much as it was in the past. People just don't "project" these things down the road, do they?