U.s. Home Prices Post Record 18% Annual Drop in October
Falling sales and rising foreclosures has chopped 18% from home prices in 20 major U.S. cities from Oct. 2007 to Oct. 2008, the fastest rate on record.
According to the S&P/Case-Shiller index, home prices in Phoenix, Las Vegas and San Francisco sunk the most – giving back 32.7%, 31.7% and 31.0% of their value in a year’s span, respectively.
The ocean-side metros of Miami, Los Angeles and San Diego followed, with respective declines of 29.0%, 27.9% and 26.7%.
Atlanta, Seattle and Portland entered what Case-Shiller called “the double-digit club,” with annual rates of decline of 10.5%, 10.2% and 10.1%, respectively.
The three best performing housing markets – meaning the ones that lost the least value – are Dallas (-3.0%), Charlotte (-4.4%) and Denver (-5.2%).
On a monthly basis, Detroit was hit the hardest, with home prices falling 4.5% from September to October of this year. That’s a dramatic leap from the 2.5% decline from August to September.
“The bear market continues; home prices are back to their March, 2004 levels.” David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s, said in a news release.
Recent statistics from the National Association of Realtors suggest similar pain. Single-family home sales fell 8.0%, the slowest sales growth since July 1997, NAR reported last week.
And the national medium home price fell 13.2% from last year to $181,300, the largest drop since the NAR started tracking statistics, and likely the largest decline since the Great Depression, said Lawrence Yun, the trade group’s chief economist.
“Falling home prices would lead to faster contraction in consumer spending and further deterioration in bank balance sheets,” Yun said in a news release. “More importantly, falling home values would lead to higher loan defaults, including those recently modified distressed mortgages.”