SubPrime Housing Woes Continue

December 26, 2007, 10:14 am
Home Prices: Few Metro Areas Spared
Sources: S&P/Case-Shiller; J.P. Morgan

Home prices are dropping at a faster rate in most major metro areas, sparing fewer cities from anything positive to show for their housing markets.

The S&P/Case-Shiller report for October shows a composite of 10 cities recording a year-over-year decline of 6.7%, the worst since the 6.3% drop for April 1991. A larger 20-city index showed a 6.1% drop from a year earlier. Both composites dropped 1.4% over September, their largest monthly declines on record. All of the 20 areas showed monthly price declines in October (as they did in September). Eleven of 20 metro areas showed their worst year-over-year declines on record for the series.

“No matter how you look at these data, it is obvious that the current state of the single-family housing market remains grim,” Robert J. Shiller, Chief Economist at MacroMarkets LLC, said in releasing today’s numbers.

Atlanta and Dallas are the latest metro areas to show year-over-year drops. Atlanta recorded a 0.7% decline in October compared to a year earlier, while Dallas dropped 0.1%. They were among the five areas in Case-Shiller’s report for September to maintain annual price appreciation. Those still in positive year-over-year territory: Charlotte, N.C., rising 4.3%, Portland, Ore., up 1.9%, and Seattle, 3.3% higher in October.
City by City, year over year changes
Sources: S&P/Case-Shiller; Lehman Brothers

For most major areas, the figures suggest the housing market has yet to find a floor. Six metro areas posted double-digit declines in their year-over-year home prices, led by Miami (down 12.4%), Tampa (dropping 11.8%), Detroit (off 11.2%) and San Diego (declining 11.1%).
“Given conditions relating to mortgage financing, and the number of unsold homes that is piling up, all regions are likely to continue on a negative trend in the months ahead, and those with the greatest oversupply (at the bottom of the pack at the moment) will continue to fall by the most,” said Joshua Shapiro, chief economist of of MFR Inc.