Home Prices Continue Down

The S&P/Case-Shiller home-price indexes, a closely watched gauge of U.S. home prices, showed prices in July continued to drop at a record pace, although the pace of declines kept slowing. 
 
"There are signs of a slow down in the rate of decline across the metro areas, but no evidence of a bottom," David M. Blitzer, chairman of Standard & Poor's index committee, said in a statement. 
 
He added "little positive news can be found," noting the year-over-year declines in all 20 areas measured. "While some cities did show some marginal improvement over last month's data, there is still very little evidence of any particular region experiencing an absolute turnaround." 
 
Stephen Stanley, chief economist at RBS Greenwich Capital, warned that the situation could still deteriorate further. "The upheaval in financial markets this month and the ensuing economic fallout could force another leg down in housing demand, pushing home prices down further," he said. "Obviously, these July data tell us nothing about that risk." 
 
The indexes showed home prices in 10 major metropolitan areas fell a record 17.5% in July from a year earlier and 1.1% from June. The decline marks the 10-city index's 10th straight monthly report of a record decline. The index is now 21.1% below its peak two years ago. 
 
In 20 major metropolitan areas, home prices dropped 16.3% from the prior year, also a record, and 0.9% from the prior month. The 20-city index has fallen 19.5% from its June/July 2006 peak. 
 
For the three months ended in July, home prices cumulatively fell about 2.2%, compared with drops between 6% and 6.5% from the three-month periods of February through April and November thru January. 
 
Seven of the 20 regions were able to avoid price declines in July over June, though one of them -- Tampa -- didn't post a rise either, as its prices were flat. Gainers were led by Minneapolis with a 1.3% rise. 
 
The other month-to-month gainers included Atlanta, Boston, Dallas, Denver and Minneapolis, all of which have reported positive returns for three months or more. Detroit also joined the group with a 0.6% rise. But Charlotte, which had four consecutive months of month-to-month gains until July, slipped into the red with a 0.2% decline. Dallas is now the only area to have five consecutive months of month-to-month growth. 
 
Month-to-month decliners were led by Las Vegas and Phoenix, which slid 2.8% and 2.7%, respectively. 
 
For the fourth straight month, no region was able to avoid a price decline year-over-year. Las Vegas, Phoenix and Miami again posted the largest drops, all posting declines in excess of 28%.