Wednesday, October 31, 2007

Home Prices Continue to Slide

The following from the WSJ discusses the continuing slide in the price of homes. Text in bold is my emphasis.

Home prices continue to fall in most major U.S. metropolitan areas, according to the latest update of the S&P/Case-Shiller home price indexes.

Prices of single-family homes in 20 major U.S. metro areas in August were down an average of 4.4% from a year earlier, Standard & Poor's,
reported yesterday. Prices in those metro areas fell an average of 0.8% from July to August, the fastest monthly decline in the seven-year history of the 20-city index.

Prices as measured by this index have been down from a year earlier for eight straight months. "The fall in home prices is showing no real signs of a slowdown or turnaround," said Robert J. Shiller, co-creator of the index and chief economist for MacroMarkets LLC.

The Case-Shiller indexes track multiple sales of the same homes in an attempt to screen out price differences caused by shifts in the size and type of houses being sold. Some housing economists consider these indexes the best gauge of national and metro real-estate values.

The biggest declines are in the Rust Belt and in the former boom towns near the coasts. In the Tampa, Fla., area, prices were down about 10% from a year earlier. Prices continued to rise, though at a more modest rate, in parts of the Pacific Northwest and the South.

Eight of the 20 metro areas recorded their largest-ever year-over-year declines in August. Prices were up in five metro areas, led by Seattle with a 5.7% increase and Charlotte, N.C., with 5.6%.

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