Home prices drop by record amount

05.26.09
By Sarah Beldo

When will house prices hit bottom? It is a question on the mind of many first-time home buyers who want to ascertain the best time to enter the market.

It is also a question that haunts many existing homeowners, who are waiting for their houses to stop losing value.

According to the findings of the newest S&P/Case-Shiller National Home Price index, the country is not likely to see an end to price declines in the short term.

Home prices fell by a record 19.1 percent during the first quarter of 2009, setting a record for the rate of annual value decline, the index reveals.

This puts current home prices at roughly the same level they were in 2002, having lost nearly one-third of the value they had in 2006 - when the housing bubble was at its peak.

Within the 20-city index, there was an 18.7 percent year-over-year decrease seen in March, while the 10-city index tumbled by 18.6 percent. This index has fallen for the past 32 months in a row.

"We see no evidence that a recovery in home prices has begun," commented David Blitzer, chairman of the S&P index committee. "Declines in residential real estate continued at a steady pace into March."

Meanwhile, Bloomberg reports that a group of economists, mortgage bankers, realtors and homebuilders are predicting there may not be a rebound in the housing market until well into 2010.

The news provider surveyed 56 analysts, who said the large volume of foreclosures and a backlog of bank-owned properties will drag on the market's recovery.

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Current home prices are roughly the same level they were in 2002.