Home Prices Continue to Fall
U.S. home prices continued to worsen in May according to the S&P/Case-Shiller home-price index. The indices show year-over-year drops for the second straight month in every region measured.
Home prices in 10 major metropolitan areas fell by a record 17% from a year earlier and 1% from April. In 20 major metropolitan areas, home prices dropped 16% from a year earlier -- another record drop -- and 0.9% from April.
Seven areas managed to avoid price declines for the month, with the Boston, Charlotte, Dallas and Denver regions all posting 1% increases. Charlotte and Dallas are the only areas to have three consecutive months of month-to-month growth. Boston, Portland and Denver have had two straight months of increases.
Year-over-year, Las Vegas and Miami were again the weakest markets, each posting 28% declines. They were also the worst performers month-to-month, with Las Vegas down 2.9% and Miami dropping 3.6%.
David M. Blitzer, chairman of Standard & Poor's index committee, noted home prices have been dropping by the indices' measurements since August 2006. As prices swoon in the Sun Belt, where they had surged the most during the bubble, he noted the Northeast is "cyclical but less volatile" and the Midwest is facing "difficult local economies."
Last week, the National Association of Realtors said existing-home sales resumed falling in June after a reprieve in May. June home resales slid to a 4.86 million annual rate, down 2.6% from May's pace, while the median home price dropped 6.1%.
Meanwhile, The Commerce Department said last week that new-home sales fell 0.6% in June to 530,000. In May, sales fell 1.7% to 533,000. The decrease in June sales was the fifth in six months. But the Commerce Department said inventories kept receding, which is a promising sign. Bloated inventories have been depressing prices and construction.
Source: Source: WSJ | Published on July 29, 2008
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