Housing Prices Get Wrecked

The Standard & Poor's/Case-Shiller Home Price Indexes showed housing prices fell by a record annual rate in July, but the rate of decline slowed.

The 20-city index fell 16.3% in July from the same period last year - the steepest decline since the index was created in 2000. The 10-city index fell 17.5%, the biggest fall in its 21-year history. 

"There are signs of a slowdown in the rate of decline across the metro areas, but no evidence of a bottom," David M. Blitzer, chairman of the Index Committee at Standard & Poor's, said in a prepared statement. "Little positive news can be found when cities like Las Vegas and Phoenix report annual declines as large as -29.9% and -29.3%, respectively, and all 20 cities are still in negative territory on a year-over-year basis."

Seven sunbelt cities reported annual declines ranging between 20% and 30%.

"While some cities did show some marginal improvement over last month's data, there is still very little evidence of any particular region experiencing an absolute turnaround," Blitzer said.

Atlanta, Dallas, Minneapolis and Tampa showed minor improvements in their annual monthly returns, but the four cities were too close to their recent lows to determine if the markets have stabilized, Standard & Poor's said.

While annual returns are negative, Atlanta, Boston, Dallas, Denver and Minneapolis all reported positive returns for May, June and July or longer.

California continues to be hit hard in the housing downturn. Prices in Los Angeles are down 26.2% year-over-year; down 25% in San Diego and down 24.8% in San Francisco.

In New York, prices were down 7.4% between July 2007 and July 2008.

In the current housing market, Charlotte, North Carolina looks like nirvana - prices were down only 1.8% between July 2007 and July 2008, the smallest decline in the 20 cities surveyed.

It's no surprise that homebulder stocks have been hit hard in the current market. Lennar (LEN) reported a third-quarter loss as revenue fell by more than 50%. Lennar is second only to D.R. Horton (DHI) in sales and leads other major builders, including Pulte Homes (PHM) and Centex (CTX). Lennar is active in about 16 states, including hard-hit California and Florida. 

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