Case-Shiller: Prices Fell 14%, Most on Record

The Case-Shiller Home Price Indices data released today for home sales through March 2007shows a "continued broad based declines in the prices of existing single family homes across the United States, a trend that prevailed throughout 2007 and has continued into the first quarter of 2008."

Annual returns of the U.S. National Home Price fell 14.1% in Q1 2008 versus the same period a year ago. This was the largest fall in the 20-year history of the index. During the 1990-91 housing recession, the annual rate bottomed at -2.8%.

“The steep downturn in residential real estate continues,” says David M. Blitzer, Chairman of the Index committee at Standard & Poor’s. “There are very few silver linings that one can see in the data. Most of the nation appears to remain on a downward path, with 19 of the 20 metro areas reporting annual declines, and six of those now at negative rates exceeding -20%. Looking closely at these returns, you can see that 15 of the metro areas are also reporting record lows, and eleven are in double digit decline, with Chicago being the latest metro area to join these ranks. The monthly data paints a similar picture, with 18 of the metro areas reporting at least seven consecutive months of negative returns. For the first time in as many months, we finally saw monthly price appreciation in two of the metro areas – Charlotte was up 0.2% in March over February, and Dallas was up 1.1%.”

chart courtesy of S&P


Table courtesy of TFS Derivatives


National Trend of Home Price Declines Continued into the First Quarter of 2008
S&P/Case-Shiller Home Price Indices, May 27, 2008

S&P/Case-Shiller U.S. Home-Price Index Falls 14.4%
Bob Willis
Bloomberg, May 27  2008

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  1. ndd commented on May 27

    Tim Iacono of “The Mess That Greenspan Made” occasionally has graphed the CPI with the substitution of the Case-Schiller index instead of owner’s equivalent rent. A quick back of the envelope calculation suggests that, by this measure, the economy is in (-1%) DEflation!

  2. Steve commented on May 27

    Chicago Tribune each week shows YOY median prices by towns within in the different parts of the Chicago metropolitan area. Consistently about half the towns show decreases while half show increases. Not sure how that jibes with the Case/Schiller index but it doesn’t seem as bad as they make it out to be. The tribune also tracks the number of sales and that number for all communities is down. Not sure if the latest figure is the more “normal” number or not.

  3. ideal4investors commented on May 27

    To add to Steve’s comments, here in San Diego, the average is down more than 20%. But certain zip codes are up (or certain neighborhoods within certain zip codes). You don’t have to be a math genius to figure out that when you have sales happening at all levels of the price spectrum (from massive subdivisions of multi-million dollar homes to smaller, older homes in the $300,000) the effect on the median price for the little guy with a $500,000 home is going to be great.

  4. Stuart commented on May 27

    I wait with baited breathe for the spin, I mean, headline writers to perform their magic and earn their paycheck on this as well as the consumer confidence figure. To get down to 3x income, another 25% to go, California even more so.. All HELOCs issued where the 1st mortgage was given at a LTV greater than 80% are worth zip…. zip. Nary a penny has been written off. Reverse amortization mortgages… helloooo WAMU,.,… how much have you written off. Perhaps FRE and FNM can move another, ah what’s another few tens of billions between friends, to level 3 status. Sure, just take the loss to the balance sheet. I wonder if Kudlow still thinks housing is not a problem. Consumer confidence a few pts above doing the peter pan thing off the 37th floor, oh hell, markets will probably close green with all this great news, oh look,bucky’s up too. Puppet masters are evidently hard at work back from the Hamptons…

  5. mappo commented on May 27

    “There are very few silver linings that one can see in the data”
    Here’s one: lower prices means houses are becoming more affordable! Duh…

  6. ndallasj commented on May 27

    As I understand the construction of Case-Shiller, every sale of an existing home in one of the measured metros represents a potential data point if it meets their screens. If one assumes that distressed properties are a much higher percentage of sales now than in “normal” times, then that would drive a strong downward bias to the index.
    This is in addition to any bias introduced by the selection of the 20 metro areas (e.g. Las Vegas–I think it is about the 30th largest metro area).
    Living in Dallas where housing prices are stable, I need the reality (or realty) check provided by the data from other parts of the country, but just from my limited observations in the DFW area, I would dispute even the small decline shown by Shiller in our area.
    It is also rather obvious that, Cleveland and Detroit aside, the biggest drops coincide with the biggest run-ups. I’d really be interested in seeing a chart of March 08 price levels versus, say, March 05. I expect that such a chart would look quite comforting in most MSA’s.
    I agree with Steve and Ideal4 that there are large variations within metros–prices in my neighborhood are up about 5-10% over the last year; low turnover and almost no foreclosures.

  7. jagmohan Swain commented on May 27

    Good let the prices come down really fast.It’s already making sense to own a house now than rent.It will have a deflationary effect on Apartment rents by keeping the rent rise in check.Great news for renters both ways.I don’t see a bottom until inventory adjustment comes to the normal levels.But it’s fast becoming attractive to buy a house.

  8. Doug_S commented on May 27

    The average house is something like 60% over the price it was in 2000. A seventeen percent YOY drop in price may be interesting but it is nothing after the multiple years of unsustainable appreciation.

    Everytime a Congressman appears on tV saying something has to be done to keep people in their “homes” I want the anchor to ask “Are you in favor of affordable housing or high housing prices, because no one is going to stay in their home and pay the mortgage unless the price of the house exceeds the loan and loans were made way above the top of the affordability range.

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