Interest Rate Roundup

Tuesday, February 24, 2009

S&P/Case-Shiller: Home prices down 18.6% YOY in December

We just got the December data from S&P/Case-Shiller on home prices. The research group says home prices dropped 2.52% between November and December in 20 top U.S. metropolitan areas. That was a larger increase than the 2.25% drop we saw a month earlier.

On a year-over-year basis, prices dropped 18.6% in December, a slightly deeper decline than the 18.2% drop in November and the biggest decline on record. The largest YOY drops could be found in Phoenix (-34%), Las Vegas (-33%), San Francisco (-31.2%), and Miami (-28.8%). Every single market showed a decline, with the most moderate drops (again) found in Denver (-4%) and Dallas (-4.3%).

The deterioration in U.S. home prices continues apace, with the rate of decline picking up steam late last year. Rising foreclosure activity is putting pressure on prices, as lenders are increasingly pursuing a "take what we can get" selling strategy.

Meanwhile, slumping consumer confidence and increasing unemployment are pressuring sales. That pressure is causing the declines to broaden out -- from former bubble markets to just about every market in the U.S. Indeed, the latest quarterly price data from the National Association of Realtors showed median prices falling from year-ago levels in 134 out of 153 metropolitan statistical areas in the fourth quarter of 2008. That's 87.6% of the nation's markets, up from 78.9% in the third quarter.


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