Home-Price Drop Accelerates, Damping Hopes
By SUDEEP REDDY
April 30, 2008

Home-price declines are accelerating nationwide, pushing a hoped-for turnaround in the housing market further down the road.
The Standard & Poor's/Case-Shiller index that measures home prices in 20 major metro areas dropped 12.7% in February from a year earlier -- the sharpest decline in the data's two-decade history.

The S&P Case-Shiller Index shows that home prices fell 12.7% this year. Maureen Maitland of Standard & Poors discusses which markets are suffering most and says we are in a "housing recession."
With a glut of unsold homes, prices are likely to fall further. Tighter lending terms for mortgages and broader weakness in the economy, particularly in the labor market, also are depressing demand.
"There is no sign of a bottom in the numbers," said S&P analyst David Blitzer.
The 20-city Case-Shiller index declined 2.6% in February from January. Prices overall are falling by a steep 25% on a three-month annualized basis.
All 20 cities in this measure showed price drops from January to February, and almost all showed year-to-year declines; the Charlotte, N.C., area recorded a modest 1.5% increase.
Areas of the country that saw the greatest run-ups in prices in the first half of the decade are now seeing some of the steepest declines. Home prices in the Las Vegas, Miami and Phoenix markets fell in February by more than 20% from a year earlier.
 
Even after sharp drops for more than a year, however, home prices in Los Angeles, Miami and Washington, D.C., remain more than double their levels at the start of the decade.
Overall, the 20-city index has declined 14.8% since peaking in July 2006. Some Wall Street economists expect home prices to decline at least 10% more before they hit bottom.
The large supply of unsold homes on the market should accelerate the pace of price declines at least through the end of this year, said Joshua Shapiro, chief U.S. economist at consulting firm MFR Inc.
"The problem is it's such a buyer's market," he said. "People who are ready, willing and able to buy a house say, 'What's the rush? Prices are coming down.'"
Separate figures released Tuesday by the Conference Board, a private business-research group, suggested fewer consumers are poised to jump into the housing market. Only 2.4% of people surveyed said they were planning to buy a home within the next six months, matching the June 1994 level and just above the 2.3% reading in February 1983. In March, that figure was 3.4%.