U.S. Home Price Trends

Published May 30, 2008 | RSS Feed

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Home prices declined nationwide through 2007 and the trend is showing all signs of continuing through 2008. Newly released indices indicate home price declines of more than 20 percent in cities like Las Vegas, San Diego, San Francisco and Miami.

BY BAILEY HARRIS

The S&P/Case-Shiller Home Price Indices aren't perfect. They track only 70 percent of the markets in the United States and have a limited historical perspective because they weren't launched until the late 1980s.

Nevertheless, the S&P/Case-Shiller Home Price Indices are widely considered to be the best measure of what is happening in the U.S. housing market. The indices are always published on the last Tuesday of the month and offer data for all nine U.S. Census divisions.

According to the most recent index, more than $3 trillion of U.S. household wealth has vanished since prices began to fall. In the last year, prices have slipped 14.1 percent nationwide--the largest drop in the index's 20-year history.

See How Far Home Prices Have Fallen

Nineteen of 20 metro areas tracked by the S&P/Case-Shiller Home Price Index experienced home price declines in March when compared to March 2007. Most reported double digit decreases and six saw home prices decline by more than 20 percent.

Metropolitan Area	12 Month Change (%)
Atlanta	-6.5%
Boston	-5.9%
Charlotte	+0.8%
Chicago	-10.0%
Cleveland	-9.5%
Dallas	-3.3%
Denver	-5.0%
Detroit	-17.9%
Las Vegas	-25.9%
Los Angeles	-21.7%
Miami	-24.6%
Minneapolis	-14.1%
New York	-7.4%
Phoenix	-23.0%
Portland	-4.0%
San Diego	-20.5%
San Francisco	-20.2%
Seattle	-4.4%
Tampa	-19.6%
Washington	-14.7%

Source: S&P/Case-Shiller Home Price Index

The Future of Home Prices

It's hard to predict exactly how far home prices will fall because we are in a unique situation. During the 1990-1991 housing recession, the S&P/Case-Shiller Home Price Index reported an annual nationwide decline of only 2.8 percent.

Current declines are easily four times worse and show no signs of stopping anytime soon. Most economists are predicting that home prices are likely to fall much further in most metropolitan areas before they begin to climb again. Some say 10 percent; others say 20 percent.

But there is one thing that everyone can agree on: the areas that had the biggest run-ups in home prices during the boom will be the hardest hit. Examples include Miami, San Francisco, Las Vegas and Los Angeles.

Since home prices doubled and tripled in certain parts of these cities between 1997 and 2006, it is very likely that prices will fall another 20 to 30 percent before all is said and done.

Housing: The Biggest Gamble in Las Vegas

After experiencing a rapid surge in housing values, Las Vegas was among the top 20 housing markets with the largest declines in 2006. With foreclosures rising and home sales slowing, it seems Las Vegas housing has become more of a gamble than ever.

Median Price Watch: San Diego, CA

After experiencing drastic appreciation, San Diego housing has started to cool. Median prices dropped throughout the area during the month of February. Central San Diego, East County, and North County Coast saw the largest declines, but home prices seemed to drop almost everywhere in the San Diego Area.

San Francisco Rent vs. Buy Analysis

Buying used to be the smart financial move, but that isn't always the case nowadays. The San Francisco housing market is experiencing turbulent times. Prices have escalated well beyond what is affordable for the average resident, making it difficult to achieve the common dream of homeownership. If you are wondering whether or not you should take the plunge and buy in San Francisco, this rent vs. buy analysis should help.

San Francisco Home Sales Drop

The median home price in the San Francisco Bay Area held steady, but home sales dropped by nearly 25 percent. Get more info on San Francisco home sales here.

San Francisco Bay Area Home Price Reports Cause Confusion

According to some of the most recent headlines, home sales are down and prices are up in the San Francisco Bay Area of California. While it is true that sales have declined, home prices may not be increasing as reported.

The San Francisco Bay Area Bubble: Interview with Patrick Killelea (Patrick.net)

Our series of interviews with housing experts continues with an analysis of the San Francisco Bay Area housing bubble courtesy of Patrick Killelea. Partick runs Patrick.net, a wildly popular bubble blog and housing market news resource.

San Francisco Bay Area Home Sales Still Slow

Home sales did not improve in the San Francisco Bay Area of California during the month of May. A real estate tracking service reports that home sales are still at a 12 year low, and experienced double-digit declines in almost every county in the nine-county area.

New Home Sales and Prices Fall in the San Francisco Bay Area

According to new numbers released by the California Building Industry Association, sales of new homes in the San Francisco Bay Area fell sharply in the month of April. The only metropolitan area that saw an increase was Napa County. Median prices also took a dive, falling as much as 16 percent in some neighborhoods.