Case-Shiller: Prices continue to decline

From the Wall Street Journal:

In the first quarter, the Case-Shiller indexes showed home prices across the
country fell 14% from a year earlier, representing the largest drop in the
20-year history of the indexes. From the fourth quarter, prices fell 6.7%.

“The steep downturn in residential real estate continues,” David M.
Blitzer, chairman of S&P’s index committee, said. He added, “There are very
few silver linings that one can see in the data. Most of the nation appears to
remain on a downward path.”

According to the indexes, released by ratings firm Standard & Poor’s, home prices in 10 major metropolitan areas fell 15% in March from a year earlier and 2.4% from February.

In 20 major metropolitan areas, home prices dropped 14% from a year earlier and 2.2% from February.

In Atlanta, the decline in prices continues to accelerate, with homes shedding 1% in value from last month, and 6.5% from last year. Still, it could be much worse: Las Vegas has lost almost 26% over the past year, with Miami and Phoenix dropping 24.6% and 23.0%, respectively.

While there is no question that house prices in Atlanta are falling, Atlanta’s continued desirability as a place to live has acted as a buffer to the effects of the housing market as seen in the rest of the county. Prices here have not fallen as much as they have elsewhere and will most likely rebound earlier than in other areas.

Still: as the availability of mortgage loans remains limited, it continues to be a challenging time to sell a home. With that being said, it remains an ideal time for real estate investors, with many, many homes available, and homes more affordable than they have been in years.

Photo: Flying ego, originally uploaded by Laurent Filoche.

Steep declines in home prices continued in February 2008; Atlanta down 5.6 percent

From CNN:

Home prices have posted another record decline, as most of the nation's largest
markets suffered double-digit drops over last year, a survey released Tuesday
shows.

The S&P Case/Shiller Home Price Index, which tracks 20 of the
largest housing markets, showed prices plummeting by 12.7% in the 12 months
ending February. That's the biggest fall since the index began tracking prices
in 2000.

Of those 20 metro areas, 17 posted their largest year-over-year
declines ever. Ten of the 20 cities posted double-digit dips.

The 10-city Case/Shiller index is down 13.6% year-over-year, the biggest drop since
its launch in 1987.

The latest Case/Shiller price index numbers are not very encouraging and show that, unfortunately, there is no sign of a bottom in the housing market in the immediate future; in fact, the latest numbers seem to indicate that the drop in home prices is accelerating on a nationwide basis.

Moderated by an increase in the city's population, however, home prices in Atlanta are still faring better than most - only shedding 5.6 percent of value from last year. Compared to the almost 23 percent drop in value in Las Vegas, that 5.6 percent decline doesn't seem too bad.

However, there remains the danger of a vicious circle leading to further, and steeper, price depreciation, even with Atlanta's relatively-moderate 5.6 percent drop in value. As price losses continue, houses become less desirable and lenders less willing to extend mortgages. Fewer potential purchasers result in additional downward pressure on prices - and with the numbers of foreclosures and vacant properties already at record highs and expected to increase, the momentum on house prices to continue to move lower could end up accelerating very quickly.

This is not to say that anything relating to real estate investing is a lost cause. There are certainly a tremendous number of individual deals out there – perhaps more than ever before. But the nature of the market is fundamentally different, and the realities of that market have changed drastically over the past year. Strategies that worked two years ago probably are not as effective today, but the good investors continue to adapt to the market at hand and succeed.

Photo: Blue Arrow on Red, originally uploaded by raumoberbayern.

Case-Shiller: Home Prices Fall Again

Standard & Poor’s S&P/Case-Shiller Home Price Indices for January 2008 continue to show home prices declining to record levels.

The 10-City index fell 11.4 percent from January 2007. The 20-City index dropped 10.7 percent. Again, both indices reached record lows.

Home prices are declining significantly across the country, with 19 of the 20 cities in the index showing depreciation in home values. Only Charlotte, North Carolina reported a year-to-year price increase with a modest 1.8 percent gain. Miami and Las Vegas had the worst declines, each shedding 19.3 percent of value from last year.

The Atlanta decline also increased, from 3.4 to 4.8 percent.

Photo: Impacto, originally uploaded by Xosé.

Case-Shiller Home Prices: A Broken Record

The S&P/Case-Shiller Home Price Indices, released today, continue to show a broad decline in the prices of existing single-family homes, making 2007 a full year of declining prices nationwide.

Fourth-quarter 2007 prices fell a record 8.9 percent. Year-over-year prices declined 9.8 percent for the 10-city index and 9.1 percent for the 20-city.

Atlanta’s prices continued to slide: prices have now declined 3.4 percent from last year’s levels.

Investors should expect prices in the Atlanta area to continue to decline as buyers look for bargains, and excess REO and homebuilder inventory continue to contribute to the glut of homes on the market.

Photo: descent, originally uploaded by *ade.

Some Things Never Change

Two pieces of not-very-surprising news today:

First: Foreclosures soared last year, with the numbers in 2007 increasing over 2006 by 75%, according to RealtyTrac. The December-to-December increase itself was 97%.

And it doesn’t appear that the foreclosure numbers will be getting better any time soon. First American Core Logic is reporting that the risk of foreclosure has jumped 22% from last January.

Second: The S&P Case/Shiller Home Price Index is out for November 2007, and it’s showing the largest year-over-year price decline on record.

Both the ten and twenty-city indices were down: 8.4% for the ten-city and 7.7% for the twenty. The 8.4 percent decline in the ten-city index is a new record low, smashing the previous record of 6.7%, set only last month.

Once again, home prices in Atlanta lost ground. The monthly drop increased from 1.2% seen last month to 1.8%. Year-to-year, prices declined 2%.

The largest drop was once again in Miami, which saw homes shed over fifteen percent in year-over-year value.