Case-Shiller: Home Prices Off Record 18% Last Year

From Yahoo! Finance: House Prices Plunge Again, Now Down 25%

House prices plunged again in October, with the rate of year-over-year decline accelerating to a new record high of 19%. The peak-to-trough decline in the Case Shiller 10-city index is now 25%; the 20-city index is down 23%.

Given the current rate of decline and the fact that house prices still have yet to reach their long-term historical average relative to incomes and rents, we remain comfortable with our prediction of a 35%-40% total decline. Unless the rate of price decline moderates soon, this could even prove conservative.

The Obama administration will throw the kitchen sink at this problem, but we still have yet to hear a plan that might actually work. It's just hard to see how already over-leveraged consumers can be induced to pay above-average prices for houses and take on more debt when layoffs and the recession are still gaining steam. The only solution to the house-price collapse, we think, is more price drops and time.

From MarketWatch: Home Prices off Record 18% in Past Year, Case Shiller Says

Home prices are back to their March 2004 levels, having dropped in 20 major U.S. cities by 2.2% in October and by a record 18% from the previous year.

Prices have fallen in all 20 cities compared with both the prior month and October 2007, and 14 of the 20 metro areas showed record rates of annual declines. Also, 14 of 20 areas sustained declines of more than 10% on a year-over-year basis. Retreating prices are likely to accelerate in coming months due to lower demand for housing.

For Case-Shiller's original 10-city index, prices fell a record 19.1% in the previous 12 months.

The largest price drop for October was seen in Detroit, with a fall of 4.5% amid growing troubles for the Big Three automakers.

For the year, Phoenix chalked up the biggest drop - 32.7%.

Here's how prices in the other 20 cities performed in the 12 months through October:

Las Vegas, down 31.7%; San Francisco, down 31%; Miami, down 29%; Los Angeles, down 27.9%; San Diego, down 26.7%; Detroit, down 20.4%; Tampa, down 19.8%, Washington, down 18.7%; Minneapolis, down 16.3%; Chicago, down 10.8%; Atlanta, down 10.5%; Seattle, down 10.2%; Portland, down 10.1%; New York, down 7.5%; Cleveland, down 6.2%; Boston, down 6%; Denver, down 5.2%; Charlotte, down 4.4%; and Dallas, down 3%.

From Bloomberg: Phoenix Leads U.S. Home Price Decline as Lenders Unload Houses
Phoenix, the desert city that three years ago led the U.S. in home price growth, had the nation’s worst housing market during October as sales of foreclosed properties depressed prices.

The cost of a single-family home plunged 33 percent from a year earlier, according to an S&P/Case Shiller index. The decline was worse than Las Vegas, where prices fell 32 percent, and San Francisco, where they dropped 31 percent. U.S. house prices fell 18 percent in October, a record in eight years of data.

Arizona had 11,000 notices in October of so-called trustee sales, or foreclosure auctions. Foreclosure sales reduce the value of similar properties in the same area as sellers who aren’t in distress are forced to drop their prices to compete. “This was a case of the higher they climb, the faster and harder they fell.” Phoenix home prices at their 2006 peak had almost tripled within nine years, he said.

Nationally, the fall in home prices has accelerated since the October period covered by the Case Shiller report. Sales of single-family homes in November dropped 7.6 percent from the prior month, the most in two decades. Resale prices fell 13 percent from a year earlier, the biggest collapse since the Great Depression of the 1930s.

Home sales might rise in 2009, but we are going to see a continue deterioration in the prices, and we might even seen an overshoot downward in the housing price.