Home Prices Fall at Record Pace

[MichaelC 160]

18% Drop to Lowest Level Since 2004

 

Home prices fall at record pace

Index of 20 U.S. cities shows 18.2% annual drop, to the lowest levels since 2004.

By Les Christie, CNNMoney.com staff writer

Last Updated: January 27, 2009: 10:49 AM ET

 

NEW YORK (CNNMoney.com) -- An index of home prices in 20 major metropolitan areas fell at a record annual pace in November, to levels not seen since 2004, according to a report released Tuesday.

 

The S&P Case-Shiller Home Price Index, a sampling of 20 cities from across the nation, fell a record 18.2% over the 12 months ended Nov. 30. That brought the index to its lowest point since February 2004. From its peak in mid-2006, the index has plunged a whopping 25.1%.

 

Eleven of the 20 cities showed record declines, and the 12-month price drop for 14 of the cities was a double-digit percentage.

 

"The freefall in residential real estate continued through November 2008," said David M. Blitzer, chairman of the Index Committee at Standard & Poor's, in a prepared statement. He said the 20-city index has fallen for every month since August 2006, a total of 28 consecutive months.

 

The decline was very broad, with prices down at least 1% in every region of the nation during the October-November period. Eight regions recorded record monthly declines, according to Blitzer.

 

As has become the norm, Southwest cities were the hardest hit, with Las Vegas prices dropping 3.9%, the nation's worst decline. Phoenix, at 3.4% was second. The Arizona metropolis recorded the worst 12-month decline, at 32.9%, followed by Las Vegas, at 31.6%.

 

New York and Cleveland prices fell by only 1% for the month, the smallest November drops. The best 12-month performer was Dallas, where prices slipped by 3.3%. Other 12-month, single-digit percentage drops were recorded by Denver, at 4.3%, Cleveland, at 5.2%, and Charlotte N.C., at 5.3%.

 

The Case-Shiller numbers just underscore how tough the market is for home sellers, according to Mike Larson, a real estate analyst with Weiss Research.

 

But there was some positive news in Monday's report from the National Association of Realtors, which showed a bump up in the number of existing homes sold during December.

 

"We're clearly seeing some of the impact of falling prices," said Larson. "But the problem is that many of those sales are made at the cheapest prices [often of bank repossessed properties], making it hard for normal homeowners to sell."

 

He does not foresee any swift improvement in housing markets - not as long as industries of all kinds keep announcing new layoffs, as several companies did Monday when more than 70,000 Americans learned they would lose their jobs.

 

"Home prices will likely decline, albeit at a slower pace, for the rest of 2009," said Larson.

 

First Published: January 27, 2009: 9:01 AM ET

[James-Ct 0]

Estimated 2 million jobs will be lost in 2009. Looks like there will be more shake-out in housing for all of 2009 to where we get back to 2001 prices. Most people are not buying much of anything as they watch prices fall, hoping to pick up bargains during this deflationary period. Obama has zero experience at running a viable business so he has surrounded himself with Clinton administration people hoping to exploit their experience. Its a match made in hell, he offers the slick oratorical presentation and his puppeteers pull the strings. The banks in these parts aren't offering any great deals (IMO) yet. They are hoping to minimize the hit they will take when the govt mandates mortgage modifications that will allow people to keep making payments at reduced principal and interest or extended term.

 

The US dollar is in the process of becoming seriously devalued.

 

The good news is that there should be great RE deals this year.

[MichaelC 160]

While I don't want to, I must admit that I share your pessimism for 2009. I see the economy going down this year before things turn around. That economic stimulus package is just another pork laden, special interests spending package spit out from Washington, and will have little effect on this mess.