Business Week- In the housing market, the bad news just keeps coming. Nov. 27 gave us the latest release of one leading index which shows that home prices are falling at their steepest rate in 21 years. And there may be much worse ahead: Futures traders are betting that home prices will fall more than 20% in markets such as San Francisco and Miami over the next year.
The latest batch of data was released by Standard & Poor’s for its S&P/Case-Shiller home price indexes. The national index of home prices showed a drop of 4.5% from the third quarter of 2006 and the third quarter of this year, and a decline of 1.7% between the second quarter of this year and the third quarter. The 1.7% slide is the largest since the index was first created. “There is no real positive news in today’s data,” says Robert Shiller, chief economist at MacroMarkets. Shiller developed the index in conjunction with Professor Karl Case and Standard & Poor’s (which, like BusinessWeek, is part of The McGraw-Hill Companies (MHP).
On Nov. 28, the National Association of Realtors reported that sales of existing homes and condominiums for single families dropped 20% in October to 4.97 million units from the same month last year, while the median price of a home sold last month slid 5.1% from a year ago, to $207,800. The price decline was the sharpest year-over-year drop the NAR has ever recorded.
