"We’re going to see continued declines in house prices, much more so in problem areas. The decline in home prices, while necessary to clear the inventories, is building in expectations of more house-price declines, which is keeping potential buyers on the sidelines.”
–Mickey Levy, chief economist at Bank of America Corp
"We see no immediate signs of this housing downturn relenting."
–Richard Dugas, Pulte Chief Executive Officer .
Home price data continued to worsen in the US through May 2008. Unlike some of the foolishness heard from the perennial bottom callers, prices are actually
accelerating to the downside reaching new record lows.
Marketwatch notes that home prices have returned to where they were in 2004 — any price appreciation between then and now has been wiped out. The surge in Home prices — a cumulative 52% from 2003 through 2006 — still leaves home prices significantly elevated above historical norms.
The S&P/Case-Shiller Index shows annual declines in prices of existing single family homes of 15.8%:
This was the second straight month where all 20 regions posted annual
declines. 9 of the areas tracked are at record lows, while 10 regions
are in double-digits. Year-over-year, Las Vegas and Miami were again the weakest markets — down 28% each.
Table via TFS Derivatives
Record Low Annual Declines Recorded in May 2008 for the Home Price Indices
S&P/Case-Shiller, July 29, 2008
S&P/Case-Shiller May 20-City Home-Prices Fall 15.8%
Timothy R. Homan
Bloomberg, July 29, 2008
CME Housing Futures, July 29, 2008