Single-family home prices in 20 major cities were down 4.4 percent in August, according to a report released Tuesday by Standard & Poor's.
The Standard & Poor's S&P/Case-Shiller home price index is a measure of U.S. home prices. The August report marks the eighth consecutive month of negative annual returns and the 21st consecutive month of decelerating returns.
The report also reveals that an index of 10 U.S. cities fell 5 percent in August from a year ago, the biggest drop since June 1991. And a broader index of 20 cities fell 4.4 percent in August over last year, with 15 of 20 cities reporting that their prices declined. Tampa, Fla., and Detroit registered the sharpest drops of 10.1 percent and 9.3 percent, respectively. In addition, Cleveland, Las Vegas, Miami, Minneapolis, Phoenix, San Diego, Tampa, and Washington, D.C., had their lowest recorded annual returns in August.
Robert J. Shiller, chief economist at MacroMarkets and one of the creators of the index, says it doesn't appear likely that the price slide will end anytime soon.
"At both the national and metro area levels, the fall in home prices is showing no real signs of a slowdown or turnaround," says Shiller. "Year-over-year and monthly price returns are continuing to either move deeper into negative territory or are experiencing persistent diminishing returns. There is really no positive news in today's report, as most of the metro areas are showing declining or vanishing returns on both an annual and monthly basis. Only two metro areas - Denver and Detroit - showed improvement in their annual returns and even those were reports of slightly less negative numbers."
Patrick Newport, an economist for Global Insight, a Massachusetts-based economic and financial analysis firm, echoed sentiments similar to Shiller's.
"Prices are definitely going to continue dropping," Newport told BUILDER Online Tuesday morning. "This will be the biggest drop in prices ever, and the reason is because the inventory is so high."
Newport also predicts that price drops are on the horizon for four more cities involved in the study.
"It is only a matter of time before prices drop in Atlanta and Dallas," Newport says. "And Portland and Seattle will drop within a year." Newport adds that August's numbers are a continuation of a trend Global Insight has been observing consistently over the past few months and predicts a turnaround in prices may not be seen until 2009.
To download the results of this monthly report, click here.
Learn more about markets featured in this article: Las Vegas, NV.