The Financial Times reports today that home prices are currently falling at a rate never before recorded:
The Standard & Poors/Case Shiller 10-city index of single-family house prices contracted by 13.6 per cent year-on-year in February, the most since records began in 1987.
The broader 20-city index fell 12.7 per cent compared with a year earlier, the biggest drop since the index’s inception in 2001.
Are there any signs of a bottom? S&P says just the opposite, that price declines are actually accelerating:
…with repeat sale prices in the 20-city index falling by 2.6 per cent in February, compared with 2.4 per cent in January and 2.1 per cent in December.
This might have been what billionaire real-estate investor Eli Broad was thinking yesterday when he spoke at the Milken Institute Conference. From Bloomberg:
Eli Broad, a philanthropist and co- founder of KB Home, the fifth-largest U.S. homebuilder by revenue, said he expects home prices to drop another 20 percent.
“I don’t think we’re anywhere near a bottom in housing,” Broad told Bloomberg TV at the Milken Institute Conference in Beverly Hills, California. “We’re going to have a big inventory of unsold, unoccupied homes that’s going to take three or four years to clear out.”
Them’s the facts.
Sources:
Fall in US house prices accelerates
Chris Bryant
The Financial Times
KB Home’s Broad Says Home Prices May Drop Another 20%
Rhonda Schaffler and Bob Ivry
Bloomberg