Area home prices decline
Home prices are falling sharply across the nation, but the decline is especially steep in Los Angeles and Orange counties.
The price of existing single-family homes across the country fell by 8.9% in the last three months of 2007 from the fourth quarter of 2006, according to the Standard & Poor’s/Case-Shiller home price index released Tuesday. That was the sharpest year-to-year drop in the index’s 20-year history.
The Los Angeles-area index, which includes Orange County, posted a 13.7% home-price drop in the fourth quarter of 2007 from the same period a year earlier.
The L.A. index is now 15% below its peak, which Case-Shiller says occurred in September 2006. Various economists have predicted that area home prices will decline 20% to 30% from their peak level.
The decline locally was exceeded only by that in Miami, which saw a 17.5% year-to-year plunge for the quarter, and Las Vegas, Phoenix and San Diego, which all experienced drops of about 15%.
Only three areas -- Charlotte, N.C., Portland, Ore., and Seattle -- showed yearly price gains in the last quarter. Charlotte added 2.3%, Portland rose 1.2% and Seattle gained 0.5%.
The Case-Shiller index does not include condominium units or new homes. The index compares the latest sales of individual houses with their previous sales. It screens out foreclosures and accounts for remodeling work and other variables that affect pricing.
From that information, an index number is created. The index is meant to be a benchmark of the housing market in an area, rather than a median sales figure. Instead of stating prices, the index uses a score measuring percentage changes, based on a score of 100 for January 2000. The December 2007 U.S. national index score was 170.
“Wherever you look, things look bleak,” Yale University economist Robert J. Shiller, creator of the index, said of the latest numbers.
The Case-Shiller figures followed a spate of other grim housing data. The National Assn. of Realtors reported Monday that the number of existing houses and condo units sold in January was 23% below the same month a year earlier.
Also Monday, the California Assn. of Realtors said home sales statewide were down 30% in January from a year earlier, with median sales prices down 22%.
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