S&P/Case-Shiller to Atlanta: Prices Decline

Home prices have fallen for the tenth straight month, according to the S&P/Case-Shiller home price index.

The 10-city index data through October 2007 showed a record drop of 6.7 percent in year-over-year value, beating the previous record of 6.3 percent set in April 1991.

Month-to-month prices also dropped 1.4%, the largest monthly fall in the twenty years of the index.

Atlanta, where values have been holding steady during the national housing slump, finally saw year-to-year prices enter negative territory: September to October prices in Atlanta fell 1.3 percent, while one-year prices dropped 0.7%.

Atlanta has certainly fared better than other cities nationwide. Miami had an annual decline in home prices of 12.4%, Detroit shed 11.2%, and San Diego saw prices slip 11.1%.

“No matter how you look at these data, it is obvious that the current state of the single-family housing market remains grim,” said Robert J. Shiller, chief economist at MacroMarkets LLC and co-developer of the index.

“We are in uncharted territory,” Shiller said. “This was the biggest housing boom we have ever seen.”

For Atlanta-area real estate investors who are already facing a chilly housing environment, this latest news just reinforces the need to know your market before investing; buying a property with the expectation of short-term appreciation is probably unrealistic.

Now that Atlanta has seen negative growth in home values, investors should plan on this trend continuing.

With subprime ARM resents not peaking until early 2008, Atlanta most likely will continue to see a drop in home prices for the foreseeable future.

The smart investors will plan accordingly, adapt their investment strategies, and thrive.