Home prices in 20 of the nation's major metro areas in July were collectively down 16.3 percent from a year ago, according to the S&P/Case-Shiller Home Price Index released today. Prices in those metro areas were down 19.5 percent from their peak in July 2006.
"There are signs of a slow down in the rate of decline across the metro areas, but no evidence of a bottom," said David M. Blitzer, Chairman of the Index Committee at Standard & Poor's, in a press release issued to announce the numbers. "Little positive news can be found when cities like Las Vegas and Phoenix report annual declines as large as -29.9% and -29.3%, respectively, and all 20 cities are still in negative territory on a year-over-year basis."
Las Vegas and Phoenix posted the two biggest annual declines in home prices of the 20 metro areas tracked in the report, followed by Miami with a 28.2 percent decline and Los Angeles with a 26.2 percent decline. Charlotte, N.C., home prices were down 1.8 percent from July 2007, the smallest annual decline among the 20 cities tracked in the report, followed by Dallas, which reported a 2.5 percent annual decline.
Does this make it a good time to buy real estate? June Fletcher of The Wall Street Journal sagely advises that the answer is "For some people, yes. If you ...
- have access to credit
- have fat cash reserves
- aren't already over-exposed in real estate
- have a secure job or income stream
- expect to hold the property for at least two years"
But be forewarned, prices are expected to fall further, and will take awhile to rebound, according to many economists.
"I think this time residential housing is in the 100-year flood, and I think it's going to take a long time to recover," said David Shulman, senior economist at the UCLA Anderson Forecast, at the Zelman & Associates Housing Summit in Dallas on Sept. 17.
Shulman said he expects home prices nationwide to go down 25 percent from peak to trough, although he acknowledged that prices could "overshoot to the downside." And while modest appreciation could resume in late 2009, prices won't be back to their 2006 peak until at least 2016, possibly as late as 2020 in some markets, according to Shulman.
(More from Shulman and several other leading economists in the October issue of the Foreclosure News Report, scheduled to be available in mid October.)
We'd like to hear from you when and if you plan to step in and start buying. Now, in 2009, or will you wait until 2020 when everyone has forgotten about this housing slump and is raving about skyrocketing home prices?