U.S. home prices see sharpest drop since 2008

May 10, 2011 11:39AM

In the first three months of 2011 nationwide home values declined 3 percent quarter-over-quarter, the largest drop since the depths of the recession in 2008, and it’s anybody’s guess how far they’ll ultimately fall, according to a Zillow.com report cited by Marketplace. Zillow.com’s report indicated prices are down 29.5 percent since June 2006 and would continue to fall until at least 2012. Marketplace attributes the decline to the difficulty Americans are facing obtaining financing and the heftier down payments financial institutions now require so as not to get “burned” again. And as interest rates continue to rise and housing prices continue to slide, buyers will remain hesitant to enter the market for the foreseeable future. But foreclosures are probably peaking, according to Jonathan Miller of Miller Samuel. “Foreclosures are probably peaking this year, but that only means we’re about halfway,” he said. “We still have four to five more years of above-trend foreclosure activity.” New York City was among the best performing markets, as housing prices stumbled just 1.6 percent quarter-over-quarter, and 5.3 percent year-over-year. Only Pittsburgh and Riverside, Calif. experienced smaller year-over-year declines. [Marketplace]