Los Angeles, Orange County Housing Prices Fall Sharply

Local prices of single-family homes were down 7% in September from a year earlier. San Diego had the third-biggest drop, at 9.6%, about double the average in a survey of 20 metro areas.

U.S. home prices continued to fall at a fast pace, and price declines in Los Angeles and Orange counties outpaced other major metropolitan areas in September, a national index released today shows.

Local prices dropped 7% from a year earlier, according to the Standard & Poor’s/Case-Shiller composite index. The index showed that home prices fell an average of 4.9% in 20 metro areas nationwide.

San Diego recorded the third-worst decline, with a 9.6% drop from the previous year; only Florida cities Tampa (11.1%) and Miami (10%) showed larger declines. Detroit mirrored San Diego, recording a 9.6% drop.

The Case-Shiller index measures the value of single-family homes based on their sales histories, 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.

The Case-Shiller numbers accompanied other grim assessments of the housing market. A U.S. Conference of Mayors report predicted a 16% decline for California home prices in 2008 and a nationwide decline of 7% next year.

The mayors report cites foreclosures and failed sub-prime mortgages as driving a housing recession that will drag home values down $1.2 trillion nationwide in 2008.

In California, falling home values will result in a decline of nearly $3 billion in property tax revenue in 2008.

Also today, the chief executive of one of the nation’s largest home builders said new-home sales would continue to deteriorate as foreclosed houses flooded the market, dragging down prices. D.R. Horton Inc. CEO Donald Tomnitz, speaking at a JPMorgan Chase & Co. conference in Las Vegas, said that ” ‘08 is going to be worse than ‘07 for us and for the industry in general.”

L.A., O.C. home prices fall sharply
By Peter Y. Hong, Los Angeles Times