Interest Rate Roundup

Tuesday, April 29, 2008

S&P/Case Shiller Index for February: -12.7%


The latest S&P/Case-Shiller figures show home prices falling (PDF link) at an ever-faster rate. In the month of February ...

* Prices fell 2.7% between January and February in 20 major U.S. metropolitan areas. Prices were off 12.7% from a year earlier. That was worse than the 10.7% decline reported in January and the biggest decline so far for the monthly index, which was first published in 2001.

* The 10-city index has a longer history. It declined 13.6% year-over-year. That was worse than the 11.4% drop in January and the worst since S&P started tracking in the late 1980s.

* Prices fell from year-ago levels in 19 out of 20 cities. The biggest declines were found in Las Vegas (-22.8%), Miami (-21.7%), Phoenix (-20.8%), and Southern California (-19.4% in L.A. and -19.2% in San Diego). The only metropolitan area showing a gain was Charlotte (+1.5%).

Weary home sellers won't find much comfort in the latest home price numbers. We're seeing significant year-over-year price declines in many of the metropolitan areas that saw the most speculative buying during the boom. Meanwhile, even formerly strong markets like Seattle, New York, and Charlotte are starting to deteriorate.

I suspect we'll see further home price weakness in 2008 and early 2009 for many markets. Ultimately, that will prove to be "good" news because it will prompt bargain hunters to step off the sidelines, and help shrink the glut of inventory for sale.

3 Comments:

  • Mike,

    Previous housing corrections have played out over the course of 4-6 years. I think the true "bargain hunters" will be on the sidelines until at least 2010. The knife catchers will be jumping in this year and next.

    P.S. Great blog.

    By Anonymous Anonymous, at April 29, 2008 at 10:59 AM  

  • Mike, great blog.

    As a long time housing bear, I could not believe how long and far the housing bubble inflated.

    I suspect the housing faithful will have a hard time believing how long & far the bubble will deflate.

    By Anonymous MAB, at April 29, 2008 at 12:02 PM  

  • Hi,

    How about writing about the bond problem/meltdown that Denninger, Winter, and others have mentioned?

    I don't understand what they are talking about.

    By Anonymous Anonymous, at April 29, 2008 at 9:46 PM  

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