The Case-Shiller Index showed further deterioration in the housing market in October, with a fall in all 20 metropolitan areas surveyed. Not surprisingly, the National Association of Realtors paints a sunnier picture. From Bloomberg:
Home prices in 20 U.S. metropolitan areas fell in October by the most in at least six years, a private survey showed today.
Property values fell 6.1 percent from October 2006, more than forecast, after dropping 4.9 percent in September, according to the S&P/Case-Shiller home-price index. The decrease was the biggest since the group started keeping year-over-year records in 2001. The index has fallen every month this year.
Prices will probably remain under pressure as the jump in foreclosures puts even more homes on the market just as stricter lending rules make it harder for buyers to find financing. Declining values make it harder for owners to tap home equity for extra cash, posing a risk to consumer spending.
“With supply overhang enormous and mortgage financing tougher to obtain, home prices are going to decline considerably further in the quarters ahead,” said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc., a New York forecasting firm.
Compared with a month earlier, home prices dropped 1.4 percent, the biggest one-month decline since records began. The figures aren’t seasonally adjusted, so economists prefer to focus on the year-over-year change.
The median forecast of 12 economists surveyed by Bloomberg News projected a 5.7 percent decline.
The index is a composite of transactions in 20 metropolitan areas. Seventeen cities showed a year-over-year decline in prices, led by 12 percent slumps in Miami and Tampa, Florida. Three, including Charlotte, North Carolina, Seattle and Portland, Oregon, showed an increase from a year earlier.
All 20 areas covered showed a drop in prices compared with September…..
A report on Nov. 21 from the National Association of Realtors showed home prices fell in one third of U.S. cities last quarter….
The S&P/Case-Shiller index and another by the Office of Federal Housing Enterprise Oversight track the same home over time and more accurately reflect price trends, economists said.
Price gauges from the Commerce Department and the Realtors group can be influenced by changes in the types of homes sold. Higher sales of cheaper homes relative to more-expensive properties will bias the figures down.