Home prices fell at a record pace in December, with 20 of the nation's largest metropolitan areas recording an annual price decline of 9.1 percent
during 2007. According to the Standard & Poor's/Case-Shiller national price index, prices fell 8.9 percent during the fourth quarter compared to one year earlier, the largest drop in the series' 20-year history.
"We reached a somber year-end for the housing market in 2007," says Robert J. Shiller, professor at Yale University and chief economist at MacroMarkets LLC. "Home prices across the nation and in most metro areas are significantly lower than where they were a year ago. Wherever you look things look bleak, with 17 of the 20 metro areas reporting annual declines and the remaining three reporting flat or moderate growth rates.
All MSAs trending down in price; a record pace
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Miami remained the weakest market, according the the index data, reporting a double-digit annual decline of 17.5 percent, followed by Las Vegas and Phoenix at -15.3 percent each. In December, San Francisco slipped into negative double-digit territory with an annual return of -10.8 percent.
Charlotte, Portland and Seattle are the only three MSAs still experiencing positive annual growth rates; however, all MSAs recorded a drop in prices between the third and fourth quarters of last year.
"Looking closely at these negative returns, you will see that 14 of the metro areas are also reporting record lows and eight are in double digit decline," Shiller said. "The monthly data paint a similar picture, with all metro areas now reporting at least four consecutive negative monthly returns."
Many economists have taken to comparing the current downturn in housing to the early 1990s ... such a comparison might not make sense, given that during the 1990-1991 recession, the annual price rate bottomed out at -2.8 percent .. currrent annual prices drops are more than 3 times as great as those seen in the early 1990s.
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