S&P: Home Prices Down 15.3%, Still Up Significantly Since 2000

The S&P Case Shiller April 2008 report of existing home sales showed record 15.3% price declines averaged across 20 major cities (see table below), with all 20 cities declining. Home prices are now down 17.8% from 2006 and close to 2004 levels.

Though it wasn’t in today’s Case Shiller report, CNBC’s Diana Olick highlighted some critical long-term data from Chip Case (who is the “Case” half of Case Shiller) about percentage price increases from March 2000 to March 2008: “[During this eight-year period] Every single market was in the positive, except Detroit, which has its own, non-housing bubble issues. Miami prices are still up 109 percent from 2000. Los Angeles home prices are still up 107 percent from 2000. Granted, many people bought homes from 2004-2006, and those folks have lost in the game. But the average span of the average American holding onto a home is 6-8 years, which means that the bulk of Americans have still done well with their single largest investment, despite all the price drops.”

The index tracks existing single family homes, and is a highly credible pricing barometer because it excludes condos and new construction. Condos can have more volatile pricing, and new construction pricing can be artificially set by builders, especially in times of distress when discounts an incentives can skew pricing.