Daily News and Information for the Professional Real Estate Agent
Further Weakening in Home Prices
Wednesday, October 31, 2007
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NEW YORK - Data through August 2007, released today by Standard & Poor’s for its S&P/Case-Shiller® Home Price Indices, a popular measure of U.S. home prices, show further declines in the prices of existing single family homes across the United States, marking the 8th consecutive month of negative annual returns and the 21st consecutive month of decelerating returns.
The chart above (click to enlarge) depicts the annual returns of the 10-City Composite and the 20-City Composite Indices. The 10-City Composite’s annual decline of 5.0% is at a rate not seen since June 1991. The lowest on record was an annual decline of 6.3% recorded in April 1991. In August, the 20-City Composite recorded an annual decline of 4.4%.
"At both the national and metro area levels, the fall in home prices is showing no real signs of a slowdown or turnaround," says Robert J. Shiller, Chief Economist at MacroMarkets LLC. "Year-over-year and monthly price returns are continuing to either move deeper into negative territory or are experiencing persistent diminishing returns. There is really no positive news in today’s report, as most of the metro areas are showing declining or vanishing returns on both an annual and monthly basis. Only two metro areas – Denver and Detroit – showed improvement in their annual returns and even those were reports of slightly less negative numbers."
Tampa surpassed Detroit in August, reporting a double-digit annual decline of 10.1%. Detroit followed with -9.3% and San Diego with -8.3%. Remarkably, in August eight of the 20 metro areas reported their lowest recorded annual returns – these cities are Cleveland, Las Vegas, Miami, Minneapolis, Phoenix, San Diego, Tampa, & Washington D.C.
The table below (click to enlarge) summarizes the results for August 2007. The S&P/Case-Shiller Home Price Indices are revised for the 24 prior months, based on the receipt of additional source data.
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Values Decline Most in 25 Years Freddie Mac's chief economist reports a decline in home values occurred broadly across the U.S. The Pacific region fell the most while the West South Central states led growth in home values.
Existing-Home Sales to Trend up in 2008 Existing-home sales are projected to trend up in 2008, with pending home sales showing a slight near-term rise, according to the latest forecast by the National Association of Realtors. However, a recovery for new-home sales is unlikely before 2009.
