... According to Two Key Indexes
By MAYA JACKSON RANDALL and JOHN FLOWERS Wall Street Journal
February 26, 2008 11:23 a.m.
Two closely watched gauges of U.S. home prices showed broad-based declines in the prices of existing single family homes, marking 2007 as a full year of declining home prices.
U.S. home prices fell 0.3% in the fourth quarter from a year earlier and declined 1.3% between the third and fourth quarters of 2007, the Office of Federal Housing Enterprise Oversight said Tuesday. That decline was much greater than the 0.3% decline between the second and third quarters.
In December alone, prices declined 0.2% across the U.S., on average, marking the sixth consecutive monthly decline, according to the agency's monthly data. Overall, prices have fallen 2.4% from an April 2007 peak, it said in its seasonally adjusted purchase-only house price index. The index tracks average house price changes in repeat sales or refinancings of the same single-family properties.
"(Two-thousand-and-seven) showed the first four-quarter decline in the purchase-only index since its earliest data in 1991," said Ofheo Director James Lockhart.
Meanwhile, home prices in the fourth quarter were down 8.9% from a year earlier, according to the S&P/Case-Shiller home-price indexes, released Tuesday by credit-rating firm Standard & Poor's. That was largest decline in the measure's 20-year history. The 10-City composite also set a new record, falling 9.8% in 2007; the 20-city index fell 9.1%.
The Ofheo index relies on data collected by Fannie Mae and Freddie Mac, which Ofheo regulates, so it excludes loans too big for Fannie and Freddie to guarantee (those exceeding $417,000) or too shaky (the riskiest of the subprime). Case/Shiller includes those, but its data are limited to 100 major markets because it relies on the costly process of going to local property records for data.
"Wherever you look things look bleak, with 17 of the 20 metro areas reporting annual declines and the remaining three reporting flat or moderate growth rates," said Robert J. Shiller, professor at Yale University and chief economist at MacroMarkets LLC. Shiller added 14 of the metro areas are also reporting record declines, with eight being in double digit decline.
Miami remains the hardest hit of the major cities, posting an 18% annual decline. Las Vegas, Phoenix and San Diego all experienced price drops of 15%.
Charlotte, Portland and Seattle are the only three metro areas measured by the index still not seeing year-over-year price declines.
