From the AP:
A closely watched index shows home prices dropped by the sharpest annual rate on record in October.
The Standard & Poor’s/Case-Shiller 20-city housing index released Tuesday fell by a record 18 percent from October last year, the largest drop since its inception in 2000. The 10-city index tumbled 19.1 percent, its biggest decline in its 21-year history.
Both indices have recorded year-over-year declines for 22 straight months. Prices are at levels not seen since March 2004.
Prices in the 20-city index have plummeted more than 23.4 percent from their peak in July 2006. The 10-city index has fallen 25 percent since its peak in June 2006.
None of the 20 cities saw annual price gains in October — for the seventh consecutive month.
Home prices in 20 U.S. cities declined at the fastest rate on record, depressed by mounting foreclosures and slumping sales.
The S&P/Case-Shiller index declined 18 percent in the 12 months to October, more than forecast, after dropping 17.4 percent in September. The gauge has fallen every month since January 2007, and year-over-year records began in 2001.
The financial market meltdown that’s reverberated around the globe has prompted banks to curb lending, signaling the housing slump will persist for a fourth year in 2009. Falling property values have eroded household wealth, causing consumers to pare spending and deepening what is projected to be the longest recession in the postwar period.
“As 2008 comes to an end, the housing market is left in a weaker state than at the beginning of the year,” Michelle Meyer, an economist at Barclays Capital Inc. in New York, said before the report. “Uncertainty remains high given the unprecedented nature of the recession.”
Economists forecast the 20-city index would fall 17.9 percent from a year earlier, according to the median of 21 estimates in a Bloomberg News survey. Projections ranged from declines of 17 percent to 18.4 percent.
Compared with a year earlier, all areas in the 20-city survey showed a decrease in prices in October, led by a 33 percent drop in Phoenix and a 32 percent decline in Las Vegas.
“The bear market continues,” David Blitzer, chairman of the index committee at S&P, said in a statement. The declines in Atlanta, Seattle and Portland surpassed 10 percent for the first time, he said.
Home prices in 20 major U.S. cities dropped 2.2% in October from the prior month and had fallen a record 18% from the previous year, according to the Case-Shiller price index published Tuesday by Standard & Poor’s.
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 sustianed declines of more than 10% on a year-over-year basis.
For Case-Shiller’s original 10-city index, prices fell a record 19.1% in the previous 12 months.
“The bear market continues; home prices are back to their March 2004 levels,” said David Blitzer, chairman of the index committee at Standard & Poor’s.
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%.
From the Wall Street Journal:
Home prices continued to drop as the economic downturn deepened further in October, according to the S&P/Case-Shiller home-price indexes, a closely watched gauge of U.S. home prices, with home prices in the Sun Belt continuing to be hit hardest.
“The bear market continues; home prices are back to their March 2004 levels,” said David M. Blitzer, chairman of S&P’s index committee. He added that both composite indexes and 14 of the 20 metropolitan areas are reporting new record declines. As of October, the 10-city index is down 25% from its mid-2006 peak and the 20-city is down 23%, Mr. Blitzer said.
The indexes showed prices in 10 major metropolitan areas fell 19% in October from a year earlier and 3.6% from September. The drop marks the 10-city index’s 13th straight monthly report of a record decline.
In 20 major metropolitan areas, home prices dropped 18% from the prior year, also a record, and 2.2% from September.
Once again, none of the regions was able to stave off a decline from September to October.