Case-Shiller: Home Prices Fall By 19.1% In First Quarter

Real Estate Broker/Owner

According to Case-Shiller, home prices dropped -19.1% in the first quarter and are now down -32.2% since peaking in the second quarter of 2006.

While we can debate the accuracy in terms of the percentage changewith the Case-Shiller index as there are a couple of other indexes that track home values with varrying percentage declines, the on thing that is not up for debate is the trend that the housing market is still in a free fall in terms of home values

The NAR data also points to continued and precipitous home value declines.

Now while this data is concerning, keep in mind that appreciation is a trailing indicator as it indicates what happened last year and is not an accurate or reliable indicator of what is going to happen in the future.  However, what is alarmingis that based on the month's supply of housing, the leading indicator of future home values, the housing market is not any better today than it was last year.

Despite broad foreclosure moratoriums, historically low mortgage rates, a first time home buyer tax credit, and government sponsored loan modifications programs, in March of 2009, according to the NAR, there was still a 9.8 month supply of housing compared to a 10 month supply of housing in March of 2008.

What this means is that in the absence of a real housing stimulus plan we will continue to see significant home value declines for an extended period of time.  In fact, based on a lot of evidence, we are only in the eye of the storm right now.




Comments (2)

Norma Brandsberg
Marks Realty Co. Inc., Lynchburg, VA, 540-586-9496 - Forest, VA

Remember that the housing price index is also influenced by the type of buyer. Here we are seeing many more first time home buyers. That lowers the home prices index and scews it lower. The stats for average price drop  are not as bad as the figures would suggest.

I would be interested in what others are seeing in their markets.

May 26, 2009 01:40 AM
Mark MacKenzie
Phoenix, AZ

Hi Norman,

Thanks for the comment.

I would suggest that the price index is influenced not by the buyer but rather by the type of property that is being sold, foreclosures.

Unfortunately, foreclosures are escalating for a multitude of reasons and will be here for a while:

May 26, 2009 01:54 AM