Home Prices Post Record Decline

The latest S&P/Case-Shiller home price index data came out today and the numbers are grim. Data through December 2008 show that prices of existing single family homes across the United States continue to set record declines. The national index recorded an 18.2% decline in the 4th quarter of 2008 versus the 4th quarter of 2007, the largest in the series’ 21-year history. The 10-City and 20-City Composites also set new records, with annual declines of 19.2% and 18.5%, respectively. From the peak in the second quarter of 2006, average home prices are down 26.7% in the United States.

Four markets saw peak declines of greater than 40%. They were Miami, Phoenix, Las Vegas and surprise here, San Francisco, which prior to this seemed to be holding up better than other markets even in hard-hit California. “There are very few, if any, pockets of turnaround that one can see in the data,” says David M. Blitzer, Chairman of the Index committee at Standard & Poor’s. “Most of the nation appears to remain on a downward path, with all of the 20 metro areas reporting annual declines, and eight now with negative rates exceeding 20%.”

Separately, the California Building Industry Association announced today, that housing construction in January posted the lowest annual rate on record. According to statistics compiled by the Construction Industry Research Board, just 2,007 permits were pulled throughout California during the month of January, down 57 percent when compared to the same month a year ago and also down 57 percent from December. On a seasonally adjusted basis, the annual rate of production for total new units during the month was just 27,800, the lowest on record.

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