Oct. housing prices plummet
The drop in the S&P/Case-Shiller survey - of 6.7 percent - was the biggest since April 1991.
NEW YORK - Prices for existing homes fell in October for the 10th consecutive month, posting their largest drop since early 1991, according to a widely watched key index released yesterday.
The Standard & Poor's/Case-Shiller home-price index slid 6.7 percent from October 2006.
"No matter how you look at these data, it is obvious that the current state of the single-family housing market remains grim," Robert Shiller, who helped create the index, said in a statement.
The previous record decline was 6.3 percent, recorded in April 1991. The index tracks prices of single-family homes in 10 metropolitan areas. The Philadelphia area is not included in that index or in a broader Case-Shiller index of 20 cities, also released yesterday.
The two Case-Shiller indexes are considered strong measures of home prices because they examine price changes of the same property over time, instead of calculating a median price of homes sold during the month.
Four of the largest groups currently trying to sell homes - banks holding foreclosed properties, home builders, speculators and unemployed consumers - are typically flexible about lowering home prices because they need to get rid of the property, said Patrick Newport, an economist with financial consultant Global Insight Inc.
Sales of homes will likely start to rebound late in 2008, with price appreciation to follow, Newport said.
The 20-city Case-Shiller index fell 6.1 percent in October from the year before. Both indexes fell 1.4 percent in October from September.
Among the 20 areas used in the broader index, 11 posted record year-over-year declines, and all 20 declined in October compared with September.
Leading the index lower was Miami, where prices fell 12.4 percent in October compared with the same month last year.
Detroit, Las Vegas, Phoenix, San Diego and Tampa, Fla., also posted double-digit year-over-year declines.
Atlanta and Dallas, which had previously posted price gains, fell in October.
Only three areas - Charlotte, N.C.; Portland, Ore.; and Seattle - posted year-over-year home-price appreciation in October. Charlotte posted the largest gains at 4.3 percent.
Among the three, only Charlotte is likely to be saved from declining home prices within the coming few months, Newport said, because the area has not seen periods of rapid appreciation like the other markets.