Metro Area Prices Off by Record 15.8%
Reports on decreasing home prices continue to pile up adding to uncertainty about the future. Last in cue, Standard & Poor's S&P/Case-Shiller Composite Home Price Index for May 2008 show a record 15.8% decrease in U.S. home prices nationally, compared to the same period in 2007.
It outweighs data released by the Office of Federal Housing Enterprise Oversight showing that in May home prices fell 4.8% nationwide compared to the same month a year ago. Apparently metropolitan areas are suffering more from the current housing crisis than the rest of the country.
According to David Blitzer, chairman of the index committee at Standard & Poor's, "Since August 2006, there has not been one month where we have seen overall price increases, as measured by the two composites," the Case-Shiller and Case-Shiller Indexes.
The agency reported it is the second month in a row that all 20 of the metropolitan areas tracked by the Case-Shiller Index "show annual declines in the prices of existing single family homes across the United States generally continued to worsen."
Up to 9 of these areas posted record lows, with half of the total 20 metropolitan areas featuring double-digit price declines. And as expected the areas that saw the largest real estate boom are now suffering the most.
"The overall real estate market continued to slide in May, with the 10-city and 20-city composites declining by 1.0% and 0.9% for the month, respectively," Mr. Blitzer said. "Regional patterns stand out: the Sunbelt led by Miami, Tampa, Phoenix, Las Vegas, San Diego and Los Angeles saw the biggest booms an now see the largest declines. The Northeast, including Boston and New York, is cyclical but less volatile while the Midwest, paced by Detroit and Cleveland face difficult local economies."
Las Vegas and Miami continued to have the most severe home price deterioration -- 28.4% and 28.3%, respectively -- over the previous 12 months, with Phoenix, Los Angeles, San Diego, San Francisco, and Tampa, Fla., all recording declines of more than 20%, according to the report. The picture does not look as gloomy in a few areas.
"One possible bright spot is that seven MSAs, while still negative, showed some improvement in their annual figures over those reported last month," Mr. Blitzer said. "Looking at the monthly statistics, seven of the 20 metro areas were positive for the May/April reading."
For example, in Charlotte and Dallas annual declines were at 0.2% and 3.1% respectively, compared to May 2007. Moreover, these markets have seen consistent positive returns in the past three months.
Since January 2000, according to S&P data the best performing markets from the longer-term perspective are Washington, Los Angeles, New York and Miami.
In some other cities, like Detroit for example, home values have decreased since January 2000. Moreover, in May "no region reported gains in excess of 1%." (c) 2008 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com/ http://www.sourcemedia.com/