Home Prices: The Trend Is Still Down
There’s good news and bad news when it came to home prices nationally in August. Let’s start with the good news for a change.
The S&P/Case-Shiller Home Price Indices released yesterday showed that the acceleration of decline in home prices was only moderate in August. That’s the good news!
The bad news: the decline in home prices for both indices set new records in August. The S&P 10-City Composite Index showed a 17.7 percent annual decline versus a 16.6 percent annual decline for the 20-City Composite Index. That compares to July when the indexes were down 17.5 percent and 16.3 percent respectively.
“The 10-City Composite and the 20-City Composite reported record 12 month declines. Furthermore, for the fifth straight month, every region reported negative annual returns,” said David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s.
The biggest losers were the Sun Belt market. Phoenix and Las Vegas both reported annual declines exceeding 30 percent. Miami, San Francisco, Los Angeles and San Diego all recorded declines in excess of 25 percent.
On a monthly basis the only winners were Cleveland and Boston which both had barely positive results in August. The biggest decliner for the month was San Francisco.
As S&P is reporting, these broad-based declines established a trend in the first half of 2008 that has continued into the second half of the year. These are the kinds of trends that are most likely going to keep foreclosures front and center in the real estate marketplace through at least next year despite a slowdown in the rate of decline.
We’d be interested in whether you think these home price trends are long-term in your area or about to make a recovery.