Case-Shiller, Home Prices Fell At Record Pace in August 2007

Down 4.4% over the past year in 20 major cities, Case-Shiller says

Home prices in 20 major U.S. cities fell 4.4% in the 12 months through August, according to the Case-Shiller price index released Tuesday by Standard & Poor’s Corp.

Prices fell 0.7% in the 20 cities between July and August, marking the fastest monthly decline recorded in the seven-year history of the 20-city index.

Prices in the original 10-city index had fallen 5% since August 2006, the fastest annual decline since 1991.

Including the latest data, prices have been down on a year-over-year basis for eight straight months.

“The fall in home prices is showing no real signs of a slowdown or turnaround,” said Robert Shiller, co-creator of the index and chief economist for MacroMarkets.

“With supply overhang growing and mortgage financing tougher to obtain, home prices are going to soften considerably further in the quarters ahead,” wrote Joshua Shapiro, chief U.S. economist for MFR Inc.

The last time prices fell so much, it took more than eight years for home prices to return to their peak level.

The Case-Shiller index, which tracks multiple sales of the same homes, is considered by many observers to be the best gauge of national and metropolitan-area real-estate values.
Falling prices make it more difficult for homeowners to tap the equity in their homes or refinance their mortgages. Millions of homeowners who took out adjustable-rate loans in 2005 and 2006 face sharply higher mortgage payments this year and next, with foreclosures having already soared as the result of payment resets.

The biggest declines are the Rust Belt and in the former boom towns along the coasts. Prices are up in the Pacific Northwest and in areas of the South, but they’re rising at a slower pace.

Fifteen of the 20 cities tracked in the index have seen prices fall in the past year, led by Tampa, Florida, with a 10.1% decline, followed by Detroit with a 9.3% loss. Indeed, eight of the 20 cities recorded their largest-ever year-over-year price declines in August.
Detroit had held the top spot among the 20 cities in previous months. A year ago, prices in Tampa had been rising at an annual rate of 14.3%.

Prices were up in five cities, led by Seattle with a 5.7% increase and Charlotte, North Carolina, with 5.6%.

Here are the year-over-year price changes for the 20 cities covered by the index:
Tampa, down 10.1%; Detroit, down 9.3%: San Diego, down 8.3%; Phoenix, down 8%; Miami, down 7.8%; Las Vegas, down 7.6%; Washington, D.C., down 7.2%; Los Angeles, down 5.7%; San Francisco, down 4.2%; Cleveland, down 4.1%; Minneapolis, down 4%; New York, down 3.8%; Boston, down 3.6%; Chicago, down 1.3%; Denver, down 0.4%; Dallas, up 0.5%; Atlanta, up 0.8%; Portland, Ore., up 2.8%; Charlotte, up 5.6%; and Seattle, up 5.7%.

Home prices falling at record pace in August
By Rex Nutting | MarketWatch