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Case-Shiller Index Records Largest Home Price Drop in 20 Years

Written By Brian Hicks

Posted March 25, 2008


cliff dive

Psssst….. Jim Cramer said on CNBC this morning that the housing market has definitely bottomed.

But I don’t believe this time either. And neither should you.

Here’s the latest cleat of reality for the troubled market. It ends with a chart that speaks a thousand words.

From AP entitled: US Home Prices Drop by 11.4% in January


“A widely watched index of U.S. home prices fell 11.4 percent in January, its steepest drop since data for the indicator was first collected in 1987.

The decline reported Tuesday in the Standard & Poor’s/Case-Shiller index means prices have been growing more slowly or dropping for 19 consecutive months.

The index tracks the prices of single-family homes in 10 major metropolitan areas in the U.S.

The broader 20-city composite index also fell, dropping 10.7 percent in January from a year ago. That makes it the first time both indexes dropped by double-digit percentages.

“Home prices continue to fall, decelerate and reach record lows across the nation,” said David Blitzer, index committee chairman at S&P. ‘No markets seem to be completely immune from the housing crisis.'”


Here is the most recent chart on the decline courtesy of Standard & Poor’s. It’s 10-City Composite shows peak-to-trough declines of over 30%.(The biggest reason actually for all of the foreclosures)



Hmmmm…..Now I don’t know about you, but if there is bottom anywhere on that chart besides the one in 1991, I’m just not seeing it.

And then there is what is going on specifically in California. According to the latest data from the Golden State, they have gone from out of the frying pan and into the fire.

Homes sales fell there by 28.5% versus last year, while the median sales price of existing homes absolutely plummeted falling by 26.2%.


Here the story from the California Association of Realtors entitled: C.A.R. reports sales decrease 28.5 percent, median home price falls 26.2 percent in February

“Home sales decreased 28.5 percent in February in California compared with the same period a year ago, while the median price of an existing home fell 26.2 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.

“Although sales rose for the fourth straight month in February by 9.5 percent compared to the previous month, they continue to be dragged down by the ongoing effects of both the credit/liquidity crunch and tighter underwriting standards that have reduced the pool of qualified buyers who can obtain a loan,” said C.A.R. President William E. Brown.

The median price of an existing, single-family detached home in California during February 2008 was $409,240, a 26.2 percent decrease from the revised $554,280 median for February 2007, C.A.R. reported. The February 2008 median price fell 4.8 percent compared with January’s revised $429,790 median price.

Highlights of C.A.R.’s resale housing figures for February 2008:

• C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in February 2008 was 14.3 months, compared with 8.2 months for the same period a year ago. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.

• Thirty-year fixed-mortgage interest rates averaged 5.92 percent during February 2008, compared with 6.29 percent in February 2007, according to Freddie Mac. Adjustable-mortgage interest rates averaged 5.03 percent in February 2008, compared with 5.51 percent in February 2007.

• The median number of days it took to sell a single-family home was 68.6 days in February 2008, compared with 66.1 for the same period a year ago.

The only question I have now is why anybody would bother listening to Cramer in the first place. Heck,I don’t even think Erin Burnett listens to him anymore.