Home Values Drop the Most in 16 Years

According to the Standard & Poor’s Case-Shiller national home price index, that was released today, the annual decline in the 10 largest cities was the sharpest since 1991. The Case-Shiller, a monthly publication by Standard & Poor, measures the residential housing market to track changes in values in 20 major metropolitan regions across the US. As of today the 20 major metropolitan regions dropped an average of .4 percent in July from June, bringing it down a total of 3.9 percent from a year earlier. S&P said that comparing against 10 of the metropolitan areas there was a 4.5 percent drop since last year, which is the worst drop since July 1991. The only 10 cities that were on the list back in 1991 were Boston, Detroit, Minneapolis, Charlotte, Las Vegas, New York, Cleveland, Portland, Dallas, and Seattle.

Tampa Florida and Detroit saw the worst price drop with declines over the past year at 8.8 percent or Tampa and 9.7 percent for Detroit. Atlanta, Charlotte, Portland, and Dallas were the only four on the list that saw price increases from last year.

Excess inventories of new and existing homes for sale and tight credit conditions for borrowers are the main cause of the increased drop. Home builders are having to drastically cut prices as they struggle to dispose of expansive inventories.