Home prices fall by sharpest annual rate ever

updated 9:52 a.m. ET Oct. 28, 2008

NEW YORK - Home prices tumbled by the sharpest annual rate ever in August, with little indication of a turnaround in sight, a closely watched index showed Tuesday.

The Standard & Poor's/Case-Shiller 20-city housing index dropped a record 16.6 percent from August last year, the largest drop since its inception in 2000. The 10-city index plunged 17.7 percent, its biggest decline in its 21-year history.

Both indices have recorded year-over-year declines for 20 consecutive months.

"The downturn in residential real estate prices continued, with very few bright spots in the data," said David M. Blitzer, chairman of the index committee at S&P.

Prices in the 20-city index have plummeted more than 20 percent since peaking in July 2006. The 10-city index has fallen nearly 22 percent since its peak in June 2006.

No city in the Case-Shiller 20-city index saw annual price gains in August — for the fifth straight month.

However, the pace of monthly declines did moderate last month from July, and Boston and Cleveland showed monthly gains from July to August.

Boston, the first city to post price declines in the 20-city index starting in October 2005, has recorded five straight monthly gains in home values.

But on the other hand, Dallas and Denver both showed negative returns in August after four consecutive months of increases.

Price declines in Las Vegas and Phoenix surpassed 30 percent in August, according to Case-Shiller, while prices in Miami, Los Angeles, San Francisco and San Diego all plunged more than 25 percent.

Home prices likely won't improve in September either as other key housing indicators have shown the housing slump still in full swing. Recent data the government and the National Association of Realtors showed the median prices for new and existing homes both tumbled by 9 percent in September.

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