House Prices Dropped 18 Percent Last Year
The latest news about house prices is not boffo if you bought one recently: Overall, house prices dropped some 18 percent from October 2007 to October 2008.
The drops are even bigger in the 20-city S&P Case-Shiller index, which tracks costs in big metro areas around the country:
Sunbelt cities suffered the most, but most of the country is watching home values fall. In Phoenix prices have plunged 32.7% since October 2007, Las Vegas home values are down 31.7% year-over-year, while San Francisco prices fell 31%. Miami, Los Angeles and San Diego recorded year-over-year declines of 29%, 27.9% and 26.7%, respectively.
"As of October 2008, the 20-City Composite is down 23.4%," said [Standard & Poor's David] Blitzer. "In October, we also saw three new markets enter the 'double-digit' club."
Atlanta, Seattle and Portland reported annual rates of decline of 10.5%, 10.2% and 10.1%, respectively.
The silver lining in all this? Well, there's at least two. First, if you're looking for a house, prices are falling. And second, for all the horror of the decline, notes an S&P big-wig, "home prices are back to their March 2004 levels."
They'll likely drop more, but there's some value in maintaining perspective, isn't there?
One more bad element to the housing bust:
"These data just add to the tremendous pressure on the president-elect and the Democrats to stimulate housing," [Jaret Seiberg, an analyst with the Stanford Group] said. "That means more lucrative tax incentives and broad foreclosure prevention. All of this will likely be in the stimulus that Congress adopts in January."
Reason's Matt Welch, committed renter, talks fluctuating house prices and more here.
Reason on "The Politics of Sky-High House Prices."