U.S. home prices fall at record pace
U.S. home prices in October plummeted at a record rate, with steep declines across Southern California, according to a national index released Wednesday.
In Los Angeles and Orange counties, prices dropped 8.8% from a year earlier, according to the Standard & Poor’s/Case-Shiller composite index.
The gauge of 10 major metropolitan areas nationwide showed that home prices fell an average of 6.7% year-over-year, the biggest decline since the index was started in 1987. The previous record decline had been 6.3% in April 1991.
When data from 20 metro areas were used, the index showed home prices fell an average of 6.1%.
“No matter how you look at these data, it is obvious that the current state of the single-family housing market remains grim,” said Robert J. Shiller, the Yale economist who co-created the index.
The data marked the 10th consecutive month of negative year-over-year returns. Six of the 20 metro areas surveyed showed double-digit declines.
The San Diego area recorded the fourth-worst decline, with an 11.1% drop from the previous year. The only bigger declines were in Miami (12.4%), Tampa (11.8%) and Detroit (11.2%).
Only three regions showed positive growth rates. Home prices held up in the Pacific Northwest, with increases of 3.3% in Seattle and 1.9% in Portland, Ore. Charlotte, N.C., fared the best, with prices up 4.3% over the previous year.
The housing market is in a slump after values had skyrocketed for most of the decade. Now, with foreclosures continuing to mount and potential home buyers staying away, real estate experts have predicted that prices would continue declining through at least next year. Some have said prices could fall 15% to 25% before turning back up.
The Case-Shiller index measures the value of single-family homes based on their sales histories, excluding condominium units and new properties.
Instead of stating average home prices, the index uses a score measuring percentage changes. The index baseline of 100 reflects home prices in January 2000.
The Los Angeles measurement peaked in September 2006 at 273.9, which meant the typical home in the area would be priced nearly 174% above its January 2000 value.
Riverside, San Bernardino and Ventura counties are not included in the survey.
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