Case-Shiller: home prices fall even further

The S&P/Case-Shiller® Home Price Indices were released today. They showed a further decline in home prices in the United States through August 2008 (the data most recently available). In the year to August, prices dropped 17.7% for the Composite-10 index and 16.6% for the Composite-20 index.

Among the twenty cities tracked in the index, particularly hard hit last month were many of the bubble cities – Phoenix, Los Angeles, San Diego, San Francisco, Miami and Las Vegas. The only cities registering a rise on a month-to-month basis were Boston and Cleveland, where things look to be bottoming.

I have been very much out of step with the increasingly pessimistic punderati because I do believe that housing declines are becoming less pronounced and that more than half of the declines have been registered. That said, the Composite-10 index shows a 27.7% decline peak-to-trough and the Composite-20 index shows a decline of 25.2% peak-to-trough, both figures adjusted for inflation. Unless we see a real Armageddon scenario, we are easily more than halfway through house price declines in the U.S.

But, nevertheless, let’s get into our Case-Shiller time machine and go back to the time when we last saw house prices this low in each of the twenty markets. The answer is in the chart below.