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Dizzying slide continues for home prices

Two reports reveal steep drops from a year earlier, with Southern California taking a painful hit.

August 27, 2008|Peter Y. Hong | Times Staff Writer

U.S. home prices continued to fall at a record pace through the first half of 2008, according to a major indicator released Tuesday.

The Standard & Poor's/Case-Shiller U.S. national home price index fell 15.4% in the second quarter compared with the same period a year earlier. The decline was the largest in 20 years for the index, which covers the entire U.S.

Los Angeles and Orange County home prices were down 25.3% in June from that month in 2007, the index showed. The L.A.-area drop was the fourth-worst among the 20 cities.

Las Vegas posted the sharpest year-over-year decline, with June prices down 28.6% from a year earlier. Miami, with a 28.3% annual decline was next, followed by Phoenix, which saw prices fall 27.9% from the previous June.

Every city in the index posted an annual price decline, but in Charlotte, N.C., that drop was only 1% in June from a year earlier.

In addition to the quarterly national index, Standard and Poor's released its monthly index of home prices in 20 major metropolitan areas, which also posted record declines. June prices were down 15.9% from a year earlier.

Standard & Poor's analysts also noted that the 20-city index's June year-over-year drop was only a moderate slide from its May decline of 15.8% from May 2007.

"It is possible we are seeing some regions struggling to come back, which has resulted in some moderation in price declines at the national level," said David M. Blitzer, chairman of the index committee for Standard & Poor's.

Blitzer cited as examples Charlotte and Dallas, which have seen month-to-month price increases in the last four months. Compared with the same month a year earlier, however, both cities posted price declines.

Those cities did not experience the same large price gains during the housing boom as the cities now showing the worst declines.

The Case-Shiller index compares the latest sales of detached houses with previous sales, and accounts for factors such as remodeling that might affect a house's sale price over time. From those data, an index score is created to show price changes.

The 20-city index for June was down 18.8% from its peak in July 2006.

More bleak housing news came Tuesday from the U.S. Census Bureau and the Department of Housing and Urban Development. The agencies reported July new-home sales were down 35.3% from a year earlier. The number of new homes sold in July was up 2.4%, however, from June.

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peter.hong@latimes.com

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