NO CONFIDENCE; Home Prices, Consumer Numbers Plunge Again
Byline: David M. Dickson, THE WASHINGTON TIMES
Home prices plunged at a record rate in October, reaching their lowest levels in 4 1/2 years, a closely monitored housing report revealed Tuesday.
With home foreclosures and layoffs continuing to rise and consumer confidence plummeting to a record low in December, housing prices are not likely to hit bottom anytime soon, analysts say.
Home prices in the Washington metropolitan area declined 2.7 percent in October, the largest monthly decrease on record. Compared with October 2007, Washington-area prices were 18.7 percent lower, according to the Standard & Poor's/Case-Shiller Home Price Indices.
House prices in the Washington region have fallen 26.3 percent since they peaked in May 2006. However, they are still 85 percent above their January 2000 level.
In recent years, U.S. housing prices have fallen the most since the Great Depression.
Fourteen of 20 metropolitan areas tracked by the S&P/Case-Shiller indexes showed record rates of annual declines in October. The 20-city composite index plunged a record 18 percent compared with October 2007. A 10-city composite index was down 19.1 percent from a year earlier, another record. Moreover, 14 of the 20 regions suffered price declines of more than 10 percent during the latest 12 months.
Adjusted for inflation, housing prices fell even more because the consumer price index was rising 3.7 percent during the 12-month period ending in October, noted Patrick Newport, U.S. economist for IHS Global Insight.
The bear market continues. Home prices are back to their March 2004 levels, said David M. Blitzer, chairman of the Index Committee at Standard & Poor's.
As of October 2008, the 10-city composite index is down 25 percent from its June 2006 peak, and the 20-city composite has declined 23.4 percent, Mr. Blitzer said.
Three new markets - Atlanta, Seattle and Portland, Ore. - entered the double-digit club, as home prices in those metropolitan areas fell more than 10 percent over a 12-month period for the first time. During the past year, three metro areas have experienced home-price declines of more the 30 percent: Phoenix (32.7 percent), Las Vegas (31.7 percent) and San Francisco (31 percent). …