Home Prices Slip a Record 19.1%

Following a trend that began in late 2007 and prevailed throughout 2008, US home prices continued to fall at a record pace over the first quarter of this year, dampening hopes the housing slump is nearing an end. The S&P/Case-Shiller US National Home Price Index recorded a 19.1% decline in Q109 compared to Q108, marking the largest decline in the series’ 21-year history. “We see no evidence that a recovery in home prices has begun,” said David Blitzer, chairman of the index committee for Standard & Poor’s. On a month-over-month basis, prices in 20 major metropolitan areas fell an average 2.2% in March and were down 18.7% in the past year. Seventeen of those areas experienced a monthly decline, with Minneapolis, Detroit and New York posting record declines. The three worst performing metropolitan areas in March were once again, located in the Sunbelt, each reporting negative year-over-year returns in excess of 30%. Phoenix was down 36%, while Las Vegas dropped 31.2% and San Francisco fell 30.1%. Just as in February, Dallas, Denver and Boston fared comparatively best, down a lesser 5.5%, 5.6% and 8.0%, respectively. As of March 2009, average home prices across the US sat at levels similar to those seen in Q402. And from the peak in Q206, average home prices were down 32.2%. “On a positive note, nine of the studied metros are reporting a relative improvement in year-over-year returns and nine of the 20 metro areas saw an improvement in their monthly returns compared to February,” says Blitzer. “Furthermore, this is the second month since October 2007 where the 10- and 20-City Composites did not post a record annual decline.” That’s not to mention the recent jump in housing starts and home sales, which, alone, signal signs of stabilization. Albeit, analysts remain skeptical of pronouncing a bottom in the market. “We can cheer all the data under the sun but until prices stabilize, I imagine that no sustainable gain in the pace of sales will be seen,” wrote Dan Greenhaus, equity strategist for Miller Tabak & Co., according to Market Watch. And while inventories remain high, “downward pressure on home prices should continue for the foreseeable future.” Write to Kelly Curran.