Gregory J. Heym
Executive Vice President, Chief Economist
By CANDACE TAYLOR
While the New York City real estate market has managed to avoid price cuts, the nationwide market has dropped to pre-boom 2004 levels, a closely watched housing index shows.
"We've erased the last four years of gains," a vice president of index analysis at Standard & Poor's, Maureen Maitland, said. "Home prices are still falling, and the pace of the decline does not seem to be abating."
The 20-city S&P/Case-Shiller Home Price Indices for April was 169.85, compared with 167.43 in August 2004, evaporating the appreciation homebuyers saw in the past four years.
Nationwide, the 20 major American cities in the index, which tracks the sale of single-family homes monthly, declined a record 15.3%, with 13 cities reaching all-time lows. In New York, home prices dropped 1.3% in April from the month earlier period, and more than 8% year over year.
In a separate report released yesterday, the Office of Federal Housing Enterprise Oversight, which looks at lower-priced homes that have government-backed mortgages, said prices across the country fell 0.8% in April compared with March, and 4.6% year over year, reaching December 2005 levels.
The two reports measure home prices differently, an economist at Global Insight, Patrick Newport, said. "The truth is somewhere in between the two," he said. Both are "telling a consistent story that prices are dropping nationally."
"Prices are probably going to drop quite a bit more because there's so much inventory out there," Mr. Newport added.
For the first time this year, every city measured in the S&P/Case-Shiller index saw a year-on-year drop. Charlotte, N.C., which had been the only city in the survey to post annual growth the other months this year, saw an annual price decline of 0.1%. In 10 of the cities in the index, annual declines were in the double digits, while seven cities posted drops of 20% or more.
The index does not measure condominium or co-op sales, so few Manhattan homes are reflected in the number, although it does include single-family homes in the other boroughs.
"We by our makeup are different from every other market in the country," the chief economist at the real estate firm Terra Holdings, Gregory Heym, said. "Prices in Manhattan have yet to significantly fall."
Mr. Heym said he does not expect any "dramatic changes" in the second-quarter data, to be released June 30.
The cities with the largest decline in the index are Las Vegas, with an annual decline of 26.8%, and Miami, with a drop of 26.7%. Chicago, Cleveland, and Denver, while still posting declines, showed some improvement in annual figures from last month, indicating that price drops in those markets may be slowing.
Wednesday, June 25, 2008