Case-Shiller: L.A. home prices down 25.3% over past year

Breaking: The Standard & Poor's Case-Shiller housing index shows home prices in Los Angeles fell by 25.3% in the year ending in the June, though price declines appear to be slowing on a month-to-month basis.  After falling 1.9% from April to May in Los Angeles, prices as measured by Case-Shiller fell 1.4% from May to June.

Price declines also slowed in other cities across the country, the index shows. "While there is no national turnaround in residential real estate prices, it is possible that we are seeing some regions struggling to come back, which has resulted in some moderation in price declines at the national level," said Standard and Poor's economist David Blitzer. "The rate of home price decline may be slowing."

Nationally, Case-Shiller's composite index of 20 large cities declined by 15.4% in the quarter ending in June, and 15.9% in month of June, the sharpest annual rate of decline the index has ever measured.

Los Angeles remains one of the nation's weakest markets, according to both month-to-month data and year-over-year price changes. Here are the five markets, of 20 measured by Case-Shiller, showing the largest price declines:

City            % change from June '07    % Change May-June
Las Vegas          -28.6                        -1.6
Miami                -28.3                       -1.7
Phoenix              -27.9                       -2.6
Los Angeles         -25.3                       -1.4
San Diego            -24.2                       -1.5
20 city comp.       -15.9                       -0.5

Note: The Case-Shiller index does not translate into a dollar figure, which is why there are no actual prices, or median prices, in this post.

--Peter Viles
Your thoughts? Comments? E-mail story tips to Peter Viles

Comments

[candide]

What's a house worth in Southern California? Taxes are outrageously high, air is dirty, public resources are earmarked for illegals who have taken over all public services. I would say, a house here is not worth a damn.

[Keith]

Why the obligatory positive spin? "Struggling to come back?" Prices are falling between 1% and 2% per month. That is as bad as it has ever been in the history of this country. If someone jumps out of a plane from very high up they actually slow down as they approach the ground due to the thickening atmosphere. But if I didn't have a parachute, I'm not sure I would find that slowing very comforting.

[PhilG]

The 3-tier pricing is more relevant to Los Angeles than the single average.

[bkl]

"Nationally, Case-Shiller's composite index of 20 large cities declined by 15.4% in the quarter ending in June,"

Wrong.

The National index that fell 15.4% in the second quarter is a completely different index than the 20 city index that fell 15.9% in June. The national index was 155.32 in Q2 compared to 183.56 in 2007. The 20 city index was 167.69 in June compared to 199.44 last year.

Two different indices; two different drops.

[condo_conundrum]

I live in San Diego and prices appear to be "all over the map". The Condo market has a particularly wide spread with asking prices of comparable units in the same complex varying by 50%!

OK I know the quoted declines are actual sales but until there is some uniformity in pricing (which I think should be around 5%) then this market has a long way to go before I would risk buying.

Of course the situation is complicated by unapproved short "sales" and at the other end of the price spectrum sellers holding out for what they paid in 06 but this just highlights what a minefield RE has become.

Most folks just want a return to times when 3x median household income + 20% downpayment = median home. In SD this would be around 240k.

[Mike from NYC]

Maybe now that the prices are coming back down to some sort of realistic levels people can actually afford to buy a house in the areas affected by hyper-inflated prices and greed.

[James]

We can only hope that home prices continue to fall substantially. Only then will they be affordable.

[Jeff]

Isn't any slowing of price drops, or slight increase in sales through the April-Aug timeframe just the expected summer bounce? Everyone's getting into their new school districts, etc... I figure price drops will increase again and inventory balloon more as the fall/winter roll around.

[Tim K.]

condo_conundrum -

Asking prices are all over the map even during slow times. Back in 1997, when the housing prices were at their lowest here in Los Angeles, I still recall seeing prices 2X the exact same condo in the same building.

At some point you learn to just mentally discard all the ridiculous wishing prices that litter the MLS. Don't expect the proportion of ridiculous asking prices to decrease significantly during this upcoming downtown - in all likelihood, it won't, or not enough that you will notice. Just ignore them as though they aren't there, because effectively, they aren't for sale.

[Rob]

Keith wrote: But if I didn't have a parachute, I'm not sure I would find that slowing very comforting.

That Parachute is Red, White, and Blue. Unfortunately it has about 50 holes it and its anyone’s guess whether it will have enough resistance to work...

[Tim K.]

An interesting thought on all those who are attempting to look for the elusive "bottom" - why?

Suppose that this IS the bottom, and that in hindsight 5 years from now, prices have started a nice steady climb upwards. Will you wish you had bought now? Why?

In all likelihood, you'd be screwed even if you bought at the bottom now because no matter what direction the market goes you still CAN'T AFFORD IT.

So although it's encouraging and exciting to watch for changes in the direction of the housing market, if it changes direction before it becomes affordable for you, it doesn't mean anything. Maybe it means you have to wait out yet ANOTHER BUBBLE and CRASH. And if you're as old as I am, that may mean you NEVER buy a place in Los Angeles. But that's not so bad really. Things could be worse. You could be one of the people who bought more than they could afford.

[Laker]

Peter,
You mentioned that the CS is just an index and not dollar wise number. But i find CS index to be very useful. although it might not be 100% accurate, we can you the trend from point X to point Y as pretty accurate way to find out todays value of the property. Keep in mind that the CS is behind about 2 months, and is doing an average of 3 months back so it is smart to apply some market trend factor to really find today's value.
For a specific house that you're interested look at the sales history. Try to remove refinances and/or foreclosure sales (amount trustee "pays" for a property when it reverts back to the bank)
All that needs to be done is to plug in the sales price at date X at the cell on the CS index spreadsheet that matches the date. Then anything subsequent will pretty much show the value.
The best thing is to apply multiple sales point of same house at the correct dates in parallel columns and then average the numbers. The result should compensate for various anomalies and reflect the value to the house today/2 months back.
good luck.
If i find the time, i would create an excel widget to do that semi-automatically.

And Cal, sorry for my (usual) ranting...

[D]

It seems to me that the popularity of this blog is declining when watching the number of comments lately.

And what happened to Ann, I miss her novel length math equations...

Not really

[Rational Renter]

Tim K. - not really sure what your point is. First off, this isn't the bottom - and no where close by any economists' measures. Second, if people can't afford the houses, as you point out, then the market will continue to decline. Third, the bottom in a housing downturn is easy to "catch" because it lasts for several years.