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To a skier, schussing a black diamond means going straight down a very steep trail. Which pretty much describes what’s happening to the housing market—and not just in ski country. Today, Standard & Poor’s announced the biggest annual decline yet recorded in the S&P/Case-Shiller 10-City Composite Home Price Index. Prices in 10 big metro areas fell 6.7% from October 2006 through October 2007. That exceeds the 6.3% annual decline through April 1991, which was during a recession. (The 10-city series began in 1987.)
S&P quotes Yale economist Robert J. Shiller as saying, “No matter how you look at these data, it is obvious that the current state of the single-family housing market remains grim.” Shiller is an inventor of the index and chief economist of S&P’s index partner, MacroMarkets.
A few bullet points of awfulness:
*The 20-City Composite fell 6.1%, which was a record for the series (which goes back to 2000).
*Miami had an annual decline of 12.4%, followed by Tampa at 11.2%, Detroit at 11.2% and San Diego at 11.1%.
*Atlanta and Dallas entered negative territory in October, leaving only Charlotte, Portland, and Seattle with annual increases in home prices through October.
So not only is housing heading downhill, it’s doing so at high velocity. Alert the Red Cross.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.