The Usual News: Home Price Data Remains Grim

By Heather Bell

Let's talk ominous portents. Let's talk unmitigated disasters. Let's talk recession. Let's talk... U.S. home prices. Yep, it's that time of the month again - the release of the Standard & Poor's/Case-Shiller Home Price Indexes.

No surprises here: Things still look unbearably grim as the housing market malaise grinds onward. The 10-city composite index was down 2.8% for the month of February and a record 13.6% for the 12-month period. Meanwhile, the 20-city composite was down 2.6% for the month and 12.7% for the 12-month period. In all, the 10-city composite is down 15.8% from its June 2006 peak, while the 20-city composite has fallen 14.8% from its July 2006 peak.

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Every single one of the metropolitan statistical areas covered by the indexes showed a decline for the month of February, ranging from a 0.4% decline for Charlotte to a 5.0% drop for San Francisco. For the 12-month period, only Charlotte had a positive return, up 1.2%. Las Vegas had worst one-year decline at -22.8%, followed by Miami at -21.7% and Phoenix at -20.8%. S&P noted that Las Vegas and Miami grew rapidly in the 2004/2005 periods, with annual growth rates that were at times above 50% and 30%, respectively.

According to David M. Blitzer, chairman of the Index Committee at Standard & Poor's, the numbers offer no sign of a bottom. "The monthly data show that every one of the MSAs has now declined every month since September 2007, marking six consecutive months. On top of that, the declines have remained steep, with eight of the 20 MSAs and both composites reporting their single largest monthly decline in February," Blitzer said.

In other words, we can probably expect more of the same next month. And with most market participants and economists - Warren Buffett is the latest - already agreeing that we are in a recession, these latest results will only add to the evidence.

Source: Standard & Poor's

Comments

[Just Say Whoa!:]

Home prices are not all grim!

Home Prices Drop Most in Areas with Long Commute
www.npr.org/templates/...

"It's a different story for properties that are closer to the city's center...Inside the city, median home prices are actually up 3.5 percent from a year ago....There were a lot of negative numbers, but not in places that are close in or near public transit. The 20912 ZIP code, for example, showed almost a 10 percent increase in average sales price...David Stiff, chief economist for the company that produces the Case-Shiller Home Price Index, saw the trend in other cities, as well — including Los Angeles, San Francisco, New York, San Diego, Miami and Boston."

In other words, people who bought smaller, older homes in Central areas of Cities (not suburbs) are watching the prices on their homes go UP, not down.

Meanwhile, the "square foot heads" who bought in the burbs because it was cheaper per square foot are watching the prices of their homes drop.

Most of the square footage that they purchased is never used, except perhaps to store their "stuff" on display for others to know how successful they are!

2008 Apr 29 06:44 PM

[Angry Appra...:]

rely on statistics and economists and you will get burned

Case/Schiller is the biggest joke EVER......

has ZERO connection to REALITY

using matched pair sales to guage market movement is NOT reliable at all.

take a look at movement of the DJUSRE since mid march. Dow Jones U.S. Real Estate Index.

its up over 20%........

Credit Default Swap prices are also down indicating "fear" level in market is being reduced.

These are not "GRIM" statistics Heather.

Reos are selling, Rents are increasing.

People still need shelter. The DEMAND for housing is only growing.

S.A. Birnbaum
Certified Residential R.E. Appraiser

2008 Apr 29 07:33 PM

[DanH:]

Always question motivation. When an appraiser seeks to discredit data, why might it be? Maybe fees are based on prices, and fees dry up when brokers have no buyers? The gravy that seeped from mortgage brokers to banks to CDOs and the subprime fiasco flowed from bloated home appraisals. Appraisals that valued unimproved fifty year-old ramblers at six times construction costs and ten times average area incomes. Big fat lies. Dishonesty. The post above is an attempt at spin, at managing public opinion. Try convincing us on the fundamentals, say matching rents or average area incomes to home values. Charlatan.

2008 Apr 29 10:55 PM

[stockmarket...:]

The worldwide housing bubble was probably the biggest financial mania in history. Anyone who thinks the decline is over hasn't examined the facts. It will be years before housing stabilizes. In the meantime, there will be false bottoms as there are in any bear market and we are in a secular bear market for housing!

2008 Apr 29 11:24 PM

[johngonole:]

Makes since that housing requiring less gas might go up or stay even in this housing environment given high gas prices. The cash flow savings like energy savings makes the house more valuable.

2008 Apr 29 11:47 PM