Home prices in 20 cities fell a record-breaking 19 percent in January from the previous year, a sign that the prolonged housing slump shows no sign of abating, according to S&P/Case-Shiller Homes Prices Index data released today. But, New York City continued to fare better than much of the country.
An index of New York area home prices dropped 9.6 percent in January from the same month in 2008, according to the closely watched report, and 1.2 percent from the previous month.
The national decline is the fastest rate on record since 1987, the earliest data that Case-Shiller tracks.
New York City’s index value, which measures the average price of single-family homes within a 50-mile radius of New York City, hit its peak in June 2006 and fell 16 percent by January of 2009. The 20-city composite index is down 29 percent from its peak in 2006. The data only measures single-family homes, so it doesn’t take into account the new condominiums that have become so prevalent in Manhattan.
“New York has held up relatively well,” said David Blitzer, the chairman of Standard & Poor’s Index Committee.
The reasons, he said, are that while the New York housing market has been impacted by the difficulties in the financial services industry, it’s not the only source of income for people in the city and the area didn’t experience the explosion of home building that some other areas did in recent years.
New York “didn’t have the kind of booms you have in the Sunbelt, the amount of massive new construction,” he said. “There’s not enough space to keep building houses. One doesn’t hear stories about developers who were going to build 500 houses and after the first 100 they went broke. In Las Vegas, that’s all you’re going to hear.”
New York’s index value is higher than any other area measured by Case-Shiller, meaning home prices in the city have retained more of their value than those in other cities. New York’s index value of 181.28 indicates that a typical home has appreciated roughly 81 percent since January of 2000. That’s down significantly from the peak in 2006, when New York’s index number was 215.83. But it measures up favorably to other areas. Miami, for example, had an index number of 280.87 at its peak in 2006, but that has now plummeted 43 percent to 159.04, meaning home prices there have appreciated 59 percent since 2000.
Average home prices across the United States are at a similar level to what they were in 2003, the report says.
All 20 of the metropolitan areas measured reported annual price drops, and each has had at least five consecutive months of decline. Home price indices in nine of the areas have fallen more than 20 percent in the last year.
While low interest rates and the federal stimulus package may soon begin to prop up the housing industry, it’s unlikely to recover quickly.
“Home prices in the U.S. continue to decline and don’t show any clear signs of a turnaround or reversal,” Blitzer said. “The damage is not going to be reversed in a day.”