Home-price declines hit a record
U.S. home prices fell by their worst rate of decline ever in May, according to data released Tuesday.
The Standard & Poor’s/Case-Shiller index of home prices in 20 cities declined 15.8% in May from the same month last year. The Los Angeles area saw a 24.5% price decline, a record year-over-year decrease.
The region’s home prices in May were down 27.5% from their September 2006 peak, according to the index.
The greater L.A.-area decline from the peak now matches the drop seen in the 1990s real estate downturn but has occurred in less than two years. In the previous real estate cycle, area prices declined more gradually, falling 27% from 1990 to 1996 before stabilizing, according to the Case-Shiller index.
The only regions posting larger percentage drops than the Los Angeles area, which includes Orange County, were Las Vegas, with a 28.4% year-over-year decline in May; Miami, with a 28.3% decline; and Phoenix, with a 26.5% decline.
Those regions were among nine metro areas where year-over-year price declines hit record highs in May. The others were San Diego, San Francisco, Phoenix, Portland, Seattle and Washington, D.C.
The 20-city index is down 18.4% from its July 2006 peak.
Price declines have become routine in the beleaguered housing market.
“Since August 2006, there has not been one month where we have seen overall price increases,” said David M. Blitzer, chairman of the index committee at Standard & Poor’s.
The Case-Shiller index compares the latest sales of detached houses with previous sales and accounts for factors such as remodeling that might affect a house’s sale price over time. It excludes foreclosures. From those data, an index score is created to show price changes.
The index has a base value of 100 for January 2000. The 20-city index reading of 168.54 for May reflects a 68.5% price increase since January 2000.
The May index for the Los Angeles area was 198.59.
This month DataQuick Information Systems reported that the June median home sale price for six Southern California counties was $355,000, down 29% from the same month last year.
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