Prices Still Falling in Many Places
Recent data on home sales and prices continue to paint a disturbing picture of the housing sector, with prices continuing to decline in much of the country.
Perhaps the most disturbing news came on the home values front, with the S&P/Case-Shiller home price index finding that 19 of the nation's 20 major housing markets saw annual declines in home prices during the first quarter. Eleven saw home prices decline by double digits from a year earlier.
Six metropolitan areas saw home price declines greater than 20% from one year earlier.
"The steep downturn in residential real estate continues," said David Blitzer, chairman of Standard & Poor's index committee, in a news release. "There are very few silver linings that one can see in the data."
The weakest markets were Las Vegas, Miami and Phoenix. Other cities with a greater than 20% annual price decline were Los Angeles, San Diego and San Francisco.
California markets could decline further, according to another report. First American CoreLogic said that during the second quarter of 2008, its Core Mortgage Risk Index for the Golden State rose 41%. That's California's highest risk reading in six years, the company said. Home price declines, along with rising fraud and collateral risk, have driven mortgage default risk higher.
Only Charlotte, N.C., posted positive home price growth on an annual basis, with home values rising an anemic 0.8% year-over-year in the S&P/Case-Shiller index. S&P said that 18 of the markets have seen prices decline for at least seven consecutive months.
The quarterly data are no more promising than the annual data. Nationally, the 20 major markets tracked by the S&P/Case-Shiller index saw values decline 6.7% between the fourth quarter of 2007 and the first quarter of this year. That was an increase from the 5.4% decline seen between the third and fourth quarters of last year.
Home sales data also remain weak, with the National Association of Realtors reporting that the pace of existing home sales in April was 17% lower than it was a year earlier.
The national median price for an existing home sale was 8% lower than it had been a year earlier, the NAR said. On the bright side, the NAR reported in mid-June that it saw an unexpected rise in pending home sales in April, suggesting that buyers are starting to move into the market looking for bargains.
City with Big Price Drops
City 1-Year Decline
Las Vegas 25.9%
Los Angeles 21.7%
San Diego 20.5%
San Francisco 20.2%
SOURCE: S&P/Case-Shiller. (c) 2008 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com/ http://www.sourcemedia.com/