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June 10, 2009

House Prices On Track To Fall Another 10%-15%

House Prices On Track To Fall Another 10%-15%

Henry Blodget

CEO/Editor in Chief, Business Insider

Summary

The Case Shiller index for March showed a slight drop in the rate of decline versus February.  This supports the theory that we have passed

The Case Shiller index for March showed a slight drop in the rate of decline versus February.  This supports the theory that we have passed the peak rate of decline and that price-drops will now begin a gradual decline. 

Importantly, this does not mean the housing market is "recovering."  Prices are still dropping at nearly 19% year over year, and the market is on track to drop at least 40% from the peak and probably more (it's down almost 30% now). 

S&P: The 10-City and 20-City Composites recorded annual declines of 18.6% and 18.7%, respectively. These are slight improvements from their returns reported for February.

“Declines in residential real estate continued at a steady pace into March,” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. “All 20 metro areas are still showing negative annual rates of change in average home prices with nine of the metro areas having record annual declines. Seventeen metro areas recorded a monthly decline in March, with Minneapolis, Detroit and New York posting record monthly declines.

On a positive note, nine of MSAs are reporting a relative improvement in year-over-year returns and nine of the 20 metro areas saw an improvement in their monthly returns compared to February.