Home Price Declines Closed Out 2008 With Record Lows

The prices of existing single-family homes across the U.S. continue to set record declines – a trend that prevailed throughout all of 2007 and 2008, according to the Standard & Poor's/Case-Shiller Home Price Indices. The indices include data through last December.

The decline in the S&P/Case-Shiller U.S. National Home Price Index recorded an 18.2% decline in the fourth quarter of 2008 versus the fourth quarter of 2007, the largest in the series' 21-year history. The 10-City and 20-City Composites also set new records, with annual declines of 19.2% and 18.5%, respectively.

"There are very few, if any, pockets of turnaround that one can see in the data," comments David M. Blitzer, chairman of the index committee at S&P. "Most of the nation appears to remain on a downward path, with all of the 20 metro areas reporting annual declines, and eight of those [metropolitan statistical areas] (MSAs) now with negative rates exceeding 20%. If one looks in detail at the annual return data, it can be seen that 13 of the 20 MSA's and the two composites have been reporting consecutive record declines since December 2007. The monthly data follows a similar trend, with all of the metro areas reporting at least four consecutive months of negative returns."

All 20 metro areas are reporting negative monthly and annual rates of change in average home prices. Boston, Denver, Los Angeles, San Diego and Washington D.C. are reporting a relative improvement in year-over-year returns, in terms of lesser rates of decline than last month's values.

Detroit showed a marginal improvement in monthly returns, but was worse off in its annual rate. Minneapolis, Las Vegas and Phoenix all reported monthly declines in excess of 4.5% in December.

The seven worst performing cities in terms of year-over-year declines continue to be from the Sunbelt, reporting negative returns in excess of 20%. Phoenix was down 34%, Las Vegas reported -33% and San Francisco fell 31.2%. Denver, Dallas, Cleveland and Boston faired the best in terms of annual declines, down 4.0%, 4.3%, 6.1% and 7.0%, respectively.

SOURCE: S&P/Case Shiller Home Price Indices


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