Report Shows Sharp Decline in Home Prices
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A widely watched index of American home prices fell 11.4% in January, its steepest drop since data for the indicator was first collected in 1987.
The decline reported today in the Standard & Poor’s/Case-Shiller index means prices have been growing more slowly or dropping for 19 consecutive months.
The index tracks the prices of single-family homes in 10 major metropolitan areas in America.
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The broader 20-city composite index also fell, dropping 10.7% in January from a year ago. That makes it the first time both indexes dropped by double-digit percentages.
“Home prices continue to fall, decelerate and reach record lows across the nation,” the index committee chairman at S&P, David Blitzer, said. “No markets seem to be completely immune from the housing crisis.”
Mr. Blitzer said all 20 cities S&P tracks have seen dropping prices for five consecutive months, when compared to the prior month. What’s more, the declines are growing in severity, with 13 of the 20 cities reporting their biggest single monthly decline in January.
The worst performing markets are Las Vegas and Miami, which both reported 19.3% drops.
Charlotte, N.C., squeaked by as the only gainer, with a 1.8% rise in January.
Economists have predicted a yearly decline between 15% and 20% in housing prices, so the Case-Shiller results are not far off expectations, Global Insight’s chief U.S. economist, Brian Bethune, said.
“I wouldn’t be looking for a pattern of improvement until April, May or June,” he said.
Washington, D.C., and Minneapolis both slipped into negative double-digit territory for the first time in January, recording 10.9% and 10% drops compared to last year.
Other cities that showed double-digit losses were Phoenix (18.2%), San Diego (16.7%) Los Angeles (16.5%), Detroit (15.1%), Tampa (15%) and San Francisco (13.2%).
The index is considered a telling measure of home prices because it examines price changes of the same property over time, instead of calculating a median price of homes sold during the month.
