Home sales: Prices still sliding, but pace of decline has eased

The Case-Shiller home price index, which tracks repeat sales of single-family homes, is out today. Home prices in April for the composite of 20 U.S. metro areas fell 18% from a year earlier. The L.A. area, which includes Orange County, was down 21%. The Times story is here.

Since January, the index has broken its established pattern of record-breaking declines, which had been the case for all of 2008. The current declines still are practically the same as the record 19% January year-to-year drop for the 20-city index, however. The Los Angeles area decline is down from a 25% year-to-year decline in January.

Phoenix and Las Vegas continue to post year-to-year declines greater than 30%. Phoenix prices were down 35% in April, Las Vegas prices were off 32%. San Francisco prices in April were 28% below year-ago levels.

In the Los Angeles area, there's a substantial gap in price declines by market segment. The lowest-priced third of homes sold in April was down 54% from the peak. The highest-priced third of homes was down 31%, while mid-tier prices fell 42% from peak levels.

Low-end prices were inflated to a greater degree during the bubble, and thus had more room to fall. High-end prices didn't rise as much, and were slower to fall due to fewer subprime loans and wealthier homeowners being able to hold out longer. Now, high-end price have taken a pretty healthy hit.

But in the real world, the picture may differ from what the data shows. High-end sales volumes in the L.A. area are tiny, so while the home price index for that segment might be down 31%, relatively few houses are selling at those prices.

Those of you tracking or shopping for high-end homes may not find many homes on the market priced at 31% below peak levels. That's likely slowing the correction at the higher end, while foreclosures have put many lower-priced homes on the market at prices 50% below peak levels. 

    -- Peter Y. Hong

   

Comments

[jesse]

This mess, how is it affecting the programs that give downpayment grants, low interst loans?

I heard that one particular non-profit requires the particpant to buy a foreclosed home.

I would if they gave me a good chunk for the downpayment.

Back before the economic problems, there were also IDA programs. Where the organization, non-profit, with money provided by government, would match what you put in the IDA. One had a max of 15k, so 15K from you and 15k from them equals 30K.

So sad that those programs would be so useful now more so than during the "flush" times that we had with Bush.

Any comments please. jesser2@verizon.net
If nayone wants to send me any comments.

I am thinking of buying a house in a year or 2.

[mark g]

For sure they can hold out, many of them, but the pressure will build as they find no takers in the mid to high end... many are waiting for a rebound which will not come and will lose out more... the loans are not there to support purchases at these levels... more drops will come, and we will find out the tolerances of people who can afford the payment, but are sinking underwater by the day...

[Peter Hong]

@SELLSELLSELL -

As the first sentence of this blog post notes, the Case-Shiller index is based on repeat sales of single family homes, not median sales prices.

I may be lazy, but I did break out the price declines by price tier, to allow readers to account for differences across the price spectrum.

Again, it would elevate our discussions if commenters would make their points without juvenile ranting.

[LA-renter]

And Chicken Little said,

"The sky isn't falling! The sky isn't falling!"

[sell sellsell]

uh, i stand corrected. fair enough. i'll read your posts more carefully next time. even on the internet, i admit it is kind of lame to post a comment that ignores the first sentence.

[original thinker]

A reverse-bubble price graph is like a drop off
Mt. Whitney. You plunge steeply for a short period
of time until the landscape begins to slope out. You
continue your fall at a slower rate of descent, ever
lower and slower, for the next 75 miles until you finally
come to rest in the basin of Death Valley.

QUESTION: How many years does it take to fall 75 miles
and how far below sea level is Death Valley?

[SMRR]

More retarded coverage. Non-seasonally adjusted pace of decline slowed. Seasonally, there is an uptick in May. And even when there is supposed to be an uptick, it still fell. Hilarious. Seasonally adjusted housing is still cliff diving. My God will the coverage ever get less stupid.