Home Prices Show Annual Decline

By:: Kirk Haverkamp | December 28, 2010

U.S. home prices are again trending downward, posting their first annual decline in nine months, according to the newest Standard & Poor’s/Case Shiller survey of 20 major metropolitan markets.

Average home prices in October, the most recent month reported, were down 0.2 percent from their October 2009 level. It was the first annual decline in the 20-city home price index since January 2010, although month-to-month prices began to fall in August.

Seasonally adjusted home prices fell in all 20 metropolitan areas surveyed, compared to their September values, with six markets – Atlanta, Charlotte, Miami, Portland (Ore.), Seattle and Tampa – hitting their lowest prices reported since the home prices began to fall in 2006.

“There is no good news in October’s report. Home prices across the country continue to fall.” said David Blitzer, chair Standard and Poor’s Index Committee. “The trends we have seen over the past few

months have not changed. The tax incentives are over and the national economy remained lackluster in

October.”

Blitzer said that neither existing home sale or housing starts, which have been reported through November, are giving any cause for optimism. He noted that home sales are down more than 25 percent from their level of one year ago (during the homebuyer tax credit) and that housing construction starts remain near 30-year lows.

The biggest annual declines were posted by Chicago and Atlanta, with prices down 6.5 percent and 6.2 percent, respectively, followed by Detroit at 5.5 percent and Portland at 5.2 percent.

California cities and the nation’s capital continued to fare relatively well on an annual basis, although all showed declines for the month of October. Average home prices in the Washington, Los Angeles and San Diego markets were up 3.7, 3.3 and 3.0 percent from October 2009, while San Francisco showed an annual gain of 2.2 percent.

Measured from the peak of the housing market in June/July 2006, housing prices in the 20-city seasonally adjusted index are down nearly 30 percent through October 2009. Prices still remain 4.4 percent above the low point the market hit in April 2009.

Average home prices in the 20-city index are now at the same level they were in mid-2003.

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