Home Prices Indexes Crash In October

December 30, 2008

The S&P/Case-Shiller Home Price Indexes record another ugly month.


Back in October, the U.S. stock market saw some of its most horrendous declines, portfolio-devastating plunges that panicked investors and deepened the country's economic gloom. Now that the data are in, it looks like the housing market was having a rough time too.

The S&P/Case-Shiller Home Price Indexes continued their downward slide in October, with the 20-City Composite and the 10-City Composite down 18.0% and 19.1%, respectively, from the prior year, their worst year-over-year measure yet. Both indexes were down nearly 2% from the prior month.



According to David M. Blitzer, chairman of the Index Committee at Standard & Poor's, home prices are back down to their 2004 levels. He also noted that the two composite indexes and 14 of the 20 metro-area indexes recorded new record rates of decline in October.

Although annual declines for the 20 metro areas range from as low as 4.4% for Charlotte to as high as 32.7% for Phoenix, 14 cities saw declines of 10% or more. In addition to Phoenix, Las Vegas and San Francisco also saw annual declines of more than 30%.

According to S&P, October was the second consecutive month of monthly declines across the board for the indexes, including the metro areas and the two composite indexes. The index provider pointed out that Atlanta, Charlotte, Detroit, Minneapolis, Tampa and Washington all experienced their worst monthly decline during the month. S&P chalked most of the positive data that was seen in the spring and summer of 2008 up to seasonal patterns rather than any abatement in the decline.




The monthly and annual returns are only part of the story for home prices. Don't forget there was a boom before the bust, and after months of largely unrelenting declines, home prices in many of the cities covered by the indexes are now way off their peaks.

The 10-City and 20-City composite indexes are down 25% and 23.4% from their June 2006 and July 2006 highs, respectively. Meanwhile, Dallas is off just 4.6% from its June 2007 high, the smallest decline of any of the 20 metro areas. Charlotte and Denver are the only other two that have seen declines of less than 10% from their highs.

Phoenix remains the most noticeable train wreck, down more than 40% from its June 2006 peak, but it's in good company: Seven other metro areas are down more than 30% from their respective highs, including Tampa, Detroit, Los Angeles, San Francisco, San Diego, Miami and Las Vegas.



High Month

Decline From High

Dallas  Jun-07 -4.6
Charlotte Aug-07 -5.8
Denver Aug-06 -8.0
Portland Jul-07 -10.8
Seattle Jul-07 -11.4
Cleveland Jul-06 -11.9
New York Jun-06 -11.9
Atlanta Jul-07 -12.2
Boston Sep-05 -12.8
Chicago Sep-06 -13.7
Minneapolis Aug-06 -20.6
Washington D.C. May-06 -26.3
Tampa May-06 -30.5
Detroit Dec-05 -32.2
Los Angeles Sep-06 -34.4
San Francisco May-06 -36.1
San Diego Nov-05 -36.4
Miami Dec-06 -38.3
Las Vegas Aug-06 -39.3
Phoenix Jun-06 -40.6
20-City Composite Jul-06 -23.4
10-City Composite Jun-06 -25.0

Source: Standard & Poor's  


The Case-Shiller indexes are reported with a two-month lag.



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