More ugly real estate news came out Tuesday as the S&P/Case-Shiller U.S. National Home Price Index in December showed its largest quarterly fall in the 21-year history of the indexing series.
The drop-off in the final quarter of 2008 by the benchmark – which covers all nine U.S. census divisions – represented an 18.2% decline from the same period a year ago. S&P reported that the 10-City and 20-City composite indexes also set new records, with annual declines of 19.2% and 18.5%, respectively.
With completed December data, S&P is now saying that domestic home prices have been falling nationwide for two straight years, covering 2007 and 2008.
"The broad downturn in the residential real estate market continues,” said David Blitzer, chairman of the index committee at Standard & Poor’s, in a statement. “There are very few, if any, pockets of turnaround that one can see in the data."
The picture remained bleak in December as all of the 20 metro areas covered by the indexes were reporting annual declines. In fact, eight of those areas had negative rates exceeding 20%. And looking at annualized data, some 13 of the 20 metro areas have been reporting consecutive record declines since December 2007.
Breaking down the data on a monthly basis shows a similar trend. All of the metro areas had at least four consecutive months of negative returns in the past two years. As of December, the average U.S. home price was at a similar level as in the third quarter of 2003. From the housing market's peak in the second quarter of 2006, average home prices are down 26.7%.
Still, some bright spots did show up, although few and far between. Five metro areas -- Boston, Denver, Los Angeles, San Diego and Washington, D.C. -- saw some improvement. Those areas' rates of decline were less in December 2008 than in the previous December. Also, Detroit showed a slight improvement in monthly returns, but fell harder in 2008 on an annualized basis.
The most recent index data through December also reported that:
- 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 34.0%, Las Vegas reported -33.0% 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.
- Dallas was down just 8.6% from its peak in June 2007, while Phoenix is down 45.5% from its peak in June of 2006. Eighteen of the 20 metro areas were in double-digit declines from their peaks, with half of the metro areas posting declines of greater than 20% and four of those (Las Vegas, Miami, Phoenix and San Francisco) in excess of 40%.
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