Single-family home prices in the top U.S. markets declined in October at a record pace from year-ago levels, signaling that the gloom in the housing market may be far from over.
The Standard & Poor's/Case-Shiller Home Price Index showed an annual decline of 6.7% in the 10-city composite, according to data released yesterday. The previous largest decline on record was 6.3%, recorded in April 1991.
All of the top 20 U.S. markets tracked by the index showed price declines in October compared with the previous month, according to data released by S&P, which is a division of
. Only three markets -- Charlotte, Seattle and Portland -- showed price appreciation on a year-over-year basis.
"No matter how you look at these data, it is obvious that the current state of the single-family housing market remains grim," Robert J. Shiller, Chief Economist at MacroMarkets LLC, said in a press release. "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."
The monthly figures indicate that prices in every metro area went down in both October and September. Eleven of the 20 cities, in addition to the two composite indices, recorded their single largest monthly decline on record in October. The 20-city composite showed a decline of 1.4% over September.
Atlanta and Dallas finally entered negative territory, with declines of 0.7% and 0.1%, respectively.
In Atlanta, at least, some didn't see the declines as such a bad thing.
"The Atlanta market is correcting itself," says builder Mike Baptist, president of Haven Properties, Atlanta. "We're absorbing some inventory right now. Housing starts are down because we've learned to be more prudent before we put anything in the ground. That doesn't mean we're not alive and well. It's a great time to buy a home in Atlanta."
"I cannot tell that prices are down that much, but sales volume is down," adds builder Kenny King, president of the Hearthstone Group in Lawrenceville, Ga. He also points out that housing starts are down, and that's "a good thing," he says. "It will help the supply/demand equation
Six of the metro areas are now posting double-digit declines in their annual growth rates, according to the Case-Shiller data. Miami surpassed Tampa in October, reporting a double-digit annual decline of 12.4%. Tampa followed with -11.8%, Detroit with -11.2%, San Diego with -11.1% and lastly, Las Vegas with -10.7%.
Some people say it's even worse than the survey data indicate.
"Forget the Case-Schiller numbers -- they do not reflect the real market conditions," says Steve Hochman, author of
How To Sell Your Real Estate When Real Estate is Not Selling
. Hochman brokers deals through his company, Friendly Note Buyers, which has offices in New York, Delaware and London and helps owner-financing sellers construct the best deals. "Tampa, Fla., prices are down by 40%, Las Vegas are down by at least 50%," he says. "In some markets, we are being offered
real-estate-owned debt at 15 cents on the dollar, and even so, I have no takers."
Jay Dacey, a mortgage planner in Plymouth, Minn., agrees that actual price declines are far greater than the data indicate.
"There are some great opportunities on individual properties right now that have a larger discount than what the macro reports are showing. These sellers have factored in the 'worst case' in their price," he says. "First-time buyers and savvy investors will build long-term wealth if they buy and hold at these prices with today's available financing. Potential buyers, especially those with a long-term view, should be getting prequalified right now with a mortgage professional."
Sheree R. Curry is a freelance journalist who writes primarily about real estate, management best practices and personal finance. She lives in the Minneapolis/St. Paul area. Learn more about her at her Web site, www.currymedia.com