No Bottom to Housing Market Yet: Standard and Poor's

Housing prices continued to decline in March, suggesting that the housing market has yet to bottom out, according to a Standard & Poor's survey released today.

Monthly prices fell in 17 of the 20 metropolitan areas surveyed in the Standard and Poor's/Case Shilling Home Prices Index, one of the leading assessments of U.S. housing values. Three areas - Minneapolis, Detroit and New York - posted their steepest monthly declines on record.

Nationally, home prices also posted a record annual decline for the first quarter of 2009, down 19.1 percent compared to the first three months of 2008, the biggest annual drop for a quarter in the Index's 22-year history.

"Declines in residential real estate continued at a steady pace into March," said David Blitzer, chairman of the Standard and Poor's Index Committee. "All 20 metro areas are still showing negative annual rates of change in average home prices with nine of the metro areas having record annual declines."

On a positive note, Blitzer said that nine of the 20 metro areas posted relative improvements in their monthly returns, posting smaller declines or even slight improvements compared to February. In addition, nine posted improvements in the annual returns compared to the first quarter of 2008, although none posted improvements.

Minneapolis reported a 6.1 percent monthly decline in housing values in March, the largest monthly decline of any metro area in the history of the index. Detroit and New York also posted record monthly declines, of 4.9 percent and 2.5 percent, respectively. However, New York housing prices are still up nearly 75 percent from where they were in January 2000, whereas Detroit housing prices are 29 percent below where they stood at that time.

On average, Detroit housing prices have fallen to their mid-1995 levels; the national housing market is at the same level it stood at in the fourth quarter of 2002. The smallest annual declines were posted by Denver and Dallas, with declines of 5.5 percent and 5. 6 percent, respectively. Fifteen of the 20 metro areas reported double-digit annual declines, led by Phoenix, Las Vegas and San Francisco, where the housing markets all lost approximately one-third of their value compared to a year ago.

Compared to the peak of the housing market, all 20 metro areas have suffered double digit declines from their individual peaks in 2006-07. The Dallas market has shrunk the least, down only 11.1 percent from its peak, while the greatest losses have been posted by Phoenix and Las Vegas, both of which have lost over half of their value in recent years. Ten of the 20 metro areas have posted declines of at least 30 percent from their peak value.