Home prices fell 8.9% in 2007, the largest decline in the Case-Shiller home price index in at least 20 years, Standard & Poor’s reported Tuesday.
For the fourth straight month, nominal prices in all 20 Case-Shiller cities were lower than in the previous month.
The 20-city index fell 2.1% in December and 9.1% for the year. The original 10-city index fell 2.3% in December and 9.8% for the year.
Phoenix had the largest decline in December, falling 3.5%, followed by San Diego at 3.4% and San Francisco at 3.2%
The Case-Shiller index, which tracks multiple sales of the same homes, is considered by many observers to be the best gauge of national and metropolitan-area real-estate values. Its major flaw is that it may overemphasize the coastal regions that had the biggest bubbles.
We have been tracking the month-to-month declines in the 20-city since August 2006, and the monthly declines have been accelerating:
You will note that price declines moderated slightly in the summer months, and that may well be the case again this summer. The National Association of Realtors has reported in the past that median prices tend to decline more in the winter when demand is slower. The year-over-year trend [also for the 20-city] is showing a nearly linear decline however: