USA: House prices fall 14.4% in year
Tuesday, 27 May 2008 16:03
Seattle, on America's Pacific Northwest coast
Property prices have continued to fall across twenty metropolitan areas of the United States, according to the S&P/Case-Shiller home-price index.
Produced by Standard and Poor's, the S&P/Case-Shiller study is widely considered to be the most authoritative assessment of the market, and finds prices have fallen by 14.4 per cent over the past year.
The data include information on Los Angeles, Washington, Miami, Boston, New York and other American cities.
This is the sharpest decline since the study was initiated almost a decade ago, and marks the continuation of a trend which has seen average prices fall every month since January 2007.
Between March and February prices fell 2.2 per cent, following a 2.4 per cent dip the month earlier.
It is thought the dramatic drop in prices has been caused by a rash of forced sales following the collapse of the subprime market.
As homeowners are unable to meet the repayments on mortgages, they are forced to sell property at a lower price than those with the option to wait.
"There are very few silver linings that one can see in the data," said David M. Blitzer, chairman of the Index Committee at Standard and Poor's.
"Most of the nation appears to remain on a downward path, with 19 of the 20 metro areas reporting annual declines, and six of those now at negative rates exceeding 20 per cent."
A separate report from the American government, however, provided some unexpected good news.
Research from the Commerce Department found sales of new-build property increased by 3.3 per cent in April year-on-year, against the market trend.
Up to 526,000 such properties were sold during the month, up from a rate of 509,000 the previous month, which had been the lowest in 17-years.
Chris O'Toole