L.A. home prices down 21.7% in last year

The latest Case-Shiller report on home prices shows Los Angeles prices fell by 21.7% over the last year and were falling at an even faster rate this spring.

Nationally, Case-Shiller shows prices falling by 14.4% in 20 large American cities (see note below), by far the steepest rate of decline in the 20-year history of the index.

"There are very few silver linings that one can see in the data. Most of the nation appears to remain on a downward path," said David Blitzer, chairman of S&P's index committee.

The Case-Shiller report, which analyzes repeat sales of the same homes in large U.S. cities, shows the housing slump continues to be most pronounced in large western cities. The five biggest annual declines in price in March:

Las Vegas   down 25.9%
Miami        down 24.6%
Phoenix     down 23.0%
Los Angeles down 21.7%
San Diego    down 20.5%

Los Angeles continues to show accelerating annual price declines, although the month-to-month decline did slow a bit -- from 4.3% in the January-to-February period to 3.6% in the February-to-March period.  Still, the 3.6% decline in the most recent monthly period makes Los Angeles the third-weakest housing market in the nation by that measure, with only Miami (-4.5%) and Las Vegas (-4.4%) losing more value.

Note on "20 large cities": An earlier version of this post reported, incorrectly, that the Case-Shiller index tracks home prices in the "20 largest cities." It does not, as Bruce Webb points out in his comment below. It tracks home prices in 20 cities, but they are not the largest in America.

Your thoughs? Comments? E-mail story tips to peter.viles@latimes.com
Photo Credit: Associated Press

Comments

[dilbert dogbert]

"Mission Accomplished!" "Bring It On"

[Tim K.]

"There are very few silver linings that one can see in the data"

Again, what is with all the NEGATIVE SPIN? This guy most be a house flipper, or a selfish home owning SOB because there is absolutely NOTHING WRONG WITH LOWER PRICES FOR HOUSING.

This is all good news to future generations who must buy housing in the coming decade, and to everyone else in the entire economic food chain that depends on NEW PEOPLE BEING ABLE TO AFFORD TO MAKE A LIVING.

Sheesh, he talks as though we're all land-owning aristocrats. We're not. This is GOOD NEWS. His attitude shows just how selfish this "housing prices going down is bad" mentality is.

[Realist]

Look what has been accomplished in the past 8 years. House prices plummeting, families losing their homes across the nation, trillions of dollars of debt owing to China, Russia and Japan to pay for Iraq. Terrible balance of trade. Stock markets down. US dollar lost almost 25% of its value. Approaching somewhere between 8000-10000 military deaths in, or as a result of, the war in Iraq (and no end in sight), and gas prices now between $4 and $5 a gallon. Health care in shambles compared to other western countries. And who is getting rich? Oil companies, Big Pharma, insurance companies, and military suppliers. Hey, who's in charge here??

[A Rothman]

Okay. Another 25%, then I can buy!

[Al Brock]

This is not surprising at all. Prices were inflated on speculation, cheap cash and subprime mortgages. As early as 2003 some newspapers, including this one were using the bubble word.

It is also interesting to note that the cities cited in the article (LV, Miami, Phoenix, LA and SD) are all energy hogs as cities go (SD perhaps less so).

LV and Phoenix could not exist without tremendous amounts of energy and water imports. They should not exist and probably will not exist in 50 years.

[Raul Garcia]

As I have said time and time again we are witnessing the collapse of the largest Ponzi scheme in the history of mankind.

While you folks continue to grind yourselves down just to make ends meet in a place that has become a third world economy, I will have relocated to a beautiful area where the housing cost are half of what we pay here ($1000 a month for apartment in El Monte!?!?!).

Maybe I'll come back and flip some properties in a couple of years, since you people here are so eager to get bent over.

[Tony]

This is great news! Finally, home prices are approaching values based on fundamentals. But they still need to drop to be in line with what people can pay. When people like myself, single, young professionals, with 6 figure incomes cannot afford to buy a house (yes I could buy a condo), there are problems. People argue, "LA is just becoming more like NYC, where most people rent". That reasoning is rubbish, since the supply and demand fundamentals did not change that much over the last 5 years.

[mike]

i would guess that by the history of this blog most of the posters should be thrilled about this news.

[Bruce Webb]

Case-Shiller does not in fact track the "20 largest cities". For example it does not include Houston (no. 4) or Philadelphia (no. 5) or San Antonio (no. 6). For that matter it misses no. 10, 12, and 15-19 per this list.
http://www.infoplease.com/ipa/A0763098.html

Some of those are close enough to cities that are included to maybe be covered (San Jose to SF, Fort Worth to Dallas) but the actual geographic distribution of C-S is pretty odd and focused on mostly bubble markets.

Per Case-Shiller neither the Ohio or Missouri River basins have any inhabitants at all and the Mississippi is a howling wilderness south of Minneapolis. There may be no good alternatives to C-S but to use it as a measure of 'national markets' without pointing out its limitations is not doing your readers a favor. (Though the LA Times is not alone in this, just about every paper uses C-S in this same way.) The following is a link to their FAQ
http://www2.standardandpoors.com/spf/pdf/
index/SP_Case_Shiller_Home_Price_Indices_FAQ.pdf

[BigT]

Hey, you're no longer on the front page --is that a slap for running the congress-woman story?

[Pasadena]

The high end markets are still at the 2005 levels.... Still waiting for that 1998-2001 prediction to materialize.

[j]

great - prices need to come down to realistic level.

[James]

We continue to make progress in making homes more affordable. Hopefully the trend will continue and lawmakers don't intervene.

[RB]

dilbert dogbert said, "Mission Accomplished!" "Bring It On"

You got that right. In June of 2002, Bush gave a speech telling Americans to buy homes or the terrorists win! Totally CLASSIC!

From the White House press release: President Reiterates Goal on Homeownership

“Let me first talk about how to make sure America is secure from a group of killers, people who hate -- you know what they hate? They hate the idea that somebody can go buy a home.”

http://www.whitehouse.gov/news/releases/2002/
06/20020618-1.html

[Alejandro Salazar]

Despite of that decline 85% of workers in LA can not afford average priced house. Price has the way to go down before they are in line with incomes.

[Bud Spaulding]

Wait till after the presidential election and are borders are left wide open. Soon there will be mud houses and slums every where in California. Way to go santuary state. ViVa Mexico.

[Karl in Burbank]

There is more where that came from!

[Michael Snyder]

Now that the lenders have had their fingers burned by their own ninja loans, "smart money" has migrated to the commodities markets where these no-load s.o.b.s have managed to leverage the world's economy into a recession for pennies on the dollar. Following the tried and true freezing body scenario; Lenders have either frozen or reduced credit availability across the board as they try to inflate their capitol reserves on the back of the Fed's repeated rate cuts. With little money available to lend and underwriting standards that have evolved from nonexistent to draconian, a large portion of responsibility for the condition of the market once again rests on the lender's shoulders. Bubble prices need to correct, but what we're seeing here is the very people who inflated the bubble installing a vacuum pump on the market.
Evidence of the herd mentality in financial markets was in your face last week as an annalist at Lehman proclaimed $200 a barrel oil to be a reality by year's end. $4.00+ gasoline will deal the final death blow to Inland Empire real estate as commuting cost become untenable. Banks will continue to hoard resources and the dominoes will continue to tumble.
This situation could be brought under control by requiring appropriate capitalization by those participating in the commodities and derivatives markets. If you & I need to have 25% equity in a half million dollar investment like a home; where is the sense in allowing corporations & traders to lock up billions in commodities with little or no money down? An insurance company needs to have liquid and fixed assets in a specific ratio to the value of its' contracts; yet unregulated speculators using another Lehman "innovation" called a Credit Default Swap have managed to triple the costs of municipal debt in a year without having to prove they can cover any losses or in many cases even put up hard money to trade the instrument.
Much of the publicity around the subprime debacle has been meant to shift the attention of the public from the real culprits. While we go at each other; renter vs owner, land lord vs tenant, everybody vs Realtors, the bozos who engineered this mess have moved on to the commodities markets where they can really wreak havoc on a global scale.
Reganomics has almost succeed in wiping out small businesses as a source of innovation in America. In their arrogance, the likes of Chevron, BP & Boeing have forgotten their own humble beginnings in an effort to preserve their positions. The internet will be the undoing of these Barons as technology like hydrogen hybrid conversions for vehicles and solar powered homes become more common place.

[OH-OHHHHH!]

Salvation - IF, one can call it that, is in the rapid fall; after the greatest prop bubble of all time, beating 1986-1990 and 1996-2005. What should scare the bejeesus outta every prop owner is deja-vu II: Boeing already layed off hundred of defense workers - what happens when they close the Long Beach plant (C17s the Armed Forces don't NEED, nor want) in 2010??? Will every one of you whose paid thru the nose for outrageous 'war' spending, continue to allow ignorant politicians and bumbling Pentagon oaficials to bankrupt this country with wasteful spending? F22 at $140 million EACH. The new fancy helicopter and FLEET of Presidential helicopters at obscene prices...more subs, more sateilites and other fancy toy? It IS outta control, and you, we, everyone is much worse off.

[CD]

We knew it, we said it, they all laughed. And now you have the gas prices, inflation .... Yesterday financial times had a good interview with Nouriel, check it out.

[Nelcisco]

Peter-

Interesting that you post this Case-Shiller report, down 21.7% in L.A. almost immediately after you posted yesterday's Housing Track's version of how they see things.

Like I said on the last posting, data coming from RE's own is skewed.

[rich]

All this doom and gloom is really getting old. I think I speak for many when I say I am tired of reading about how my house lost $ 50 in value in the last week. .. I am very recently retired and just a few years ago purchased a small house THAT FIT MY RESPONSIBLE BUDGET and it is irrelevent if it goes down in value..Sure I would love to have bought in Beverly Hills, but I was smart enough to know I couldn't afford it. Only the idiots who bought outside their means and the house flippers should be worried and based on the constant stories in the LA Times I must assume many Times employees fit into this group !! I am also suspect of the reasons for such stories, as there may be questionable motive for trying to affect the market ??

[Geek Seek]

I sent this post to a friend of mine and his reaction was: "a good time to buy." Blasted NAR.

Nononono... you don't get it. See...

[allen]

OH NO the sky is falling. What to do what to do. the world is ending..Get over it.. If you live in your house it is irrelevent what it is worth.. A house is NOT AN ATM card and owning a house is not a constitutional right ( as people in New York will attest). I live in an apartment and I am sick of hearing these whiny stories about some illegal immagrant who can't afford their $300,000 house or the couple having trouble selling their vacation home...GET OVER IT AND MOVE ON and buy smarter in the future. This is survival of the fittiset. Darwinsim baby, let the weak die off..

[Slum City]

LA will fall even further as Americans leave a city ravaged by millions of illegal aliens.

Then we'll see what happens to the tax base. Mexico city North (Third World Slums) The FREE ride is over, schools will close next (we are SICK of paying for thousands of foreigners getting a free ride).