Drop in Southern California home prices outpaces nation
Home prices in Los Angeles and Orange counties fell more sharply than in most other major metropolitan areas in August, a national index released Tuesday shows.
Local prices dropped 5.7% compared to a year ago, according to the Standard & Poor’s/Case-Shiller composite index. The index showed home prices fell an average of 4.4% in 20 metro areas nationwide.
“There is really no positive news in today’s report,” said Robert J. Shiller, the Yale economist who created the index.
San Diego, with an 8.3% year-over-year decline, fared even worse than Los Angeles and Orange counties. (Riverside, San Bernardino and Ventura counties are not included in the survey.)
San Diego’s decline was topped only by Tampa, Fla.’s 10.1% fall from a year ago and Detroit’s drop of 9.3%.
Seattle and Charlotte, N.C., were the only regions to show price increases. Seattle home prices were up 5.7% from August 2006. Charlotte’s prices climbed 5.6%.
The Case-Shiller index judges the value of existing single-family homes, excluding condominium units and new properties.
Rather than 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 index peaked in September 2006 at 273.9, which meant the typical home in the area would be priced 174% above its January 2000 price.
August’s index for Los Angeles was 258.7, about a 6% decline from the 2006 peak.
Eight of the 20 areas surveyed showed record annual declines: Cleveland, Las Vegas, Miami, Minneapolis, Phoenix, San Diego, Tampa and Washington.
Rising home inventories and tightening credit have squeezed the real estate market nationally.
The Case-Shiller numbers were released on the heels of dour housing market assessments Monday by industry leaders at a Los Angeles conference on the state’s economy.
KB Homes Chief Executive Jeffrey Mezger predicted a 10% to 15% decline in California housing prices over the next 18 months. Countrywide Financial Corp. CEO Angelo Mozilo, appearing with Mezger on a panel at the conference, agreed with Mezger’s prediction and said home foreclosures would reach record highs.
