Home Prices Fall Record 15.8 Percent in May: S&P

A widely-watched home price index released Tuesday morning found continuing record home price declines in key metropolitan markets during May, as the nation’s housing markets continued to feel the effects of a historic market correction that will likely drag on for a few more years. Standard & Poor’s said its S&P/Case-Shiller Home Price Indices registered widespread declines in May, with all 20 MSAs tracked by the series posting annual declines, the second such month that trend has been observed; nine MSAs saw prices reach record lows, while 10 headed into double-digit decline during the month, the company reported. Two composite indices, a 10-city and 20-city version, each posted annual declines in excess of 15 percent; the 10-city composite saw annual declines during may reach 16.9 percent, while a 20-city composite — largely interpreted by economists as the primary indicator in the Case-Shiller series — recorded a record annual drop of 15.8 percent. “The overall real estate market continued to slide in May, with the 10-City and 20 City Composites declining by 1.0% and 0.9% for the month, respectively,” said David Blitzer, chairman of S&P’s index committee. “Since August 2006, there has not been one month where we have seen overall price increases, as measured by the two composites.” For those watching trends, seven MSAs — all still negative year-over-year — did show some measure of improvement in annual pricing trends during June compared to month-ago totals. That contrasts to eight such MSAs showing similar trending last month, however, so it’s likely that any month-to-month trending in annualized losses may be noise at this point. Charlotte and Dallas continued to represent some of the nation’s best-performing major markets in May, relatively speaking: prices in Charlotte were off a mere 0.2 percent annually, and Dallas was down 3.1 percent versus year-ago. Both markets have recorded three consecutive months of positive returns, S&P said; but it’s telling that the nation’s best performing markets are those still in the red. But that’s about it for the good news. In May, markets that experienced large gains in the recent real estate boom continued to be the biggest decliners: Miami and Las Vegas were the worst performers, returning losses of 3.6 percent and 2.9 percent, respectively. Los Angeles saw prices fall 1.94 percent between April and May, as well; and long-suffering San Diego saw prices fall another 1.4 percent in the same time frame. Seven MSAs have one year price drops that are above 20 percent, led by a 28.4 percent fall in Las Vegas and 28.3 percent drop in Miami. Phoenix has seen prices fall 26.5 percent in the last year, as well. Related links: Full S&P/Case-Shiller report For more information, visit http://www.standardandpoors.com.