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Home Prices Post Record Decline

Posted by: Chris Palmeri on February 24, 2009

The latest S&P/Case-Shiller home price index data came out today and the numbers are grim. Data through December 2008 show that prices of existing single family homes across the United States continue to set record declines. The national index recorded an 18.2% decline in the 4th quarter of 2008 versus the 4th quarter of 2007, the largest in the series’ 21-year history. The 10-City and 20-City Composites also set new records, with annual declines of 19.2% and 18.5%, respectively. From the peak in the second quarter of 2006, average home prices are down 26.7% in the United States.

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Four markets saw peak declines of greater than 40%. They were Miami, Phoenix, Las Vegas and surprise here, San Francisco, which prior to this seemed to be holding up better than other markets even in hard-hit California. “There are very few, if any, pockets of turnaround that one can see in the data,” says David M. Blitzer, Chairman of the Index committee at Standard & Poor’s. “Most of the nation appears to remain on a downward path, with all of the 20 metro areas reporting annual declines, and eight now with negative rates exceeding 20%.”

Separately, the California Building Industry Association announced today, that housing construction in January posted the lowest annual rate on record. According to statistics compiled by the Construction Industry Research Board, just 2,007 permits were pulled throughout California during the month of January, down 57 percent when compared to the same month a year ago and also down 57 percent from December. On a seasonally adjusted basis, the annual rate of production for total new units during the month was just 27,800, the lowest on record.

Reader Comments

David Nash

February 26, 2009 1:39 PM

The housing bubble expanded in the first few years of the 2000s and took 6 years to peak. It included a rapid increase in housing prices due to historically low interest rates and generally poor lending standards.

The housing boom ended at different times for different cities and states, but generally speaking, the market stalled in the summer of 2005. In 2006, we saw sliding sales volumes almost everywhere.

Unlike Sockmarkets, Real Estate can not be expected to crash and reach bottom quickly. There has been steady re-valuation. But are we anywhere near the bottom?

The global economy will struggle to cope up with falling industrial and consumer demand for several quarters more.

We can not expect Real Estate Market to improve until potential buyers get a feeling of financial security which is absent today.

David Nash:

property prices

August 22, 2009 4:23 AM
This blog is so nice.

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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.

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