Single-family, existing-home prices fell 6.7 percent in the nation's 10 largest cities in October from the same period in 2006 according to the Standard & Poor's S&P/Case-Shiller home price index, which was released Tuesday morning. The index also revealed that prices fell 6.1 percent in 20 U.S. Metropolitan Statistical Areas (MSAs).
The Standard &Poor's/Case-Schiller home price index tracks the prices of existing single-family homes in Atlanta, Boston, Charlotte, N.C., Chicago, Cleveland, Dallas, Denver, Detroit, Las Vegas, Los Angeles, Miami, Minneapolis, New York, Phoenix, Portland, Ore., San Diego, San Francisco, Seattle, Tampa, Fla., and Washington, D.C.
According to Robert J. Shiller, chief economist at MacroMarkets, and one of the creators of the index, the data released by the monthly study shows that the "current state of the single-family housing market remains grim."
"Not only did the 10-city composite post a record low in its annual growth rate, but 11 of the 20 metro areas did the same," Shiller says. "If you look at the monthly figures, every MSA went down in both October and September. Eleven of the 20 MSAs, in addition to the two composites, recorded their single largest monthly decline on record in October. For both the 10-city and 20-city composites this was a decline of 1.4 percent over September"
The 6.7 percent year-over-year drop in the 10-city index surpassed the previous record of a 6.3 percent slide in April 1991 and the 20-city index decline is the most in six years. Overall, prices retreated in 17 of the 20 cities covered and in 11 cities, prices fell at record year-over-year rates.
Miami reported a double-digit annual decline of 12.4 percent followed by Tampa with an 11.8 percent drop, Detroit with an 11.2 percent dip, and San Diego with an 11.1 percent slide. Atlanta and Dallas also entered negative territory, with declines of 0.7 percent and 0.1 percent, respectively, leaving only Charlotte, Portland, and Seattle as the MSAs still experiencing positive annual growth rates.
Patrick Newport, an economist for Global Insight, a Massachusetts-based economic and financial analysis firm, says job losses and overbuilding may have played a role in the price declines in Las Vegas, Miami, Tampa, and Detroit. Newport also predicts continued declines in the near future.
"Local conditions will play a key role in what happens to house prices. In some cities, prices will collapse. In others, they may continue to rise," Newport said in a note. "We think that the sum of these forces will drive nominal house prices down about 10 percent over the next two to three years,"
For more information about the current and past Standard & Poor's S&P/Case-Shiller home price indices, click here.