US home prices decline at record 18.5 percent

December's 2.5 percent drop in the Case-Shiller index is the second-largest ever.

By , Staff writer of The Christian Science Monitor

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    Homes, like this one in Pittsburg, Calif., are selling for lower prices than a year ago.
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The housing downturn accelerated for the sixth straight month in December, according to a 20-city index, with prices of homes declining a record 18.5 percent in one year and 27 percent since their peak in 2006.

That drop suggests that the fall in home prices is accelerating again after a period of smaller declines this past summer, according to the Case-Shiller National Home Price Index, which was released Tuesday.

"With the number of homes for sale at an all-time high, housing prices will continue declining for quite a while, and quite a bit more," Patrick Newport, an economist at IHS Global Insight, wrote in an e-mail. "Indeed, just as house prices overshot on the way up, they are likely to undershoot on the way down because of the inventory overhang."The acceleration is particularly striking in cities that have already seen some of the biggest declines in residential real estate prices. Phoenix saw prices drop a whopping 5.1 percent between November and December, followed by Las Vegas, down 4.8 percent over the same period. Their real estate values have now fallen 45.5 percent and 44.0 percent, respectively, from their peaks.

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Boston and Denver saw the smallest one-month declines, 1.3 percent and 1.5 percent, respectively. These cities have seen far more modest declines from their peaks: 16.1 percent and 10.4 percent, respectively.

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