Home prices plunged by a record amount in November, even in cities that have enjoyed relatively stable real estate markets up till now, a new report shows.
Twenty major US cities saw their home prices fall an average 18.2 percent from November of 2007, according to the S&P/Case-Shiller Home Price Indices. Worryingly, eight of the cities saw their largest one-month plunge on record. Six of them – Charlotte, Chicago, Dallas, New York, Portland, and Seattle – had seen relatively small declines in their real estate values, roughly half or less of the 20-city average.
Dallas takes a dive
Consider Dallas. It avoided the worst of the housing bubble, with home values climbing only 24.7 percent since the beginning of 2000, peaking in June 2007, and then declining 5.6 percent. (Los Angeles, by contrast, saw values more than double and then crash by a third.)
But in November, Dallas home values fell 1.2 percent from October, it's biggest one-month change up or down since the beginning of 2000 and not too far from the 1.7 percent one-month decline in Los Angeles.
Chicago suddenly wavers
Or take Chicago – one-sixth of its total real estate decline since its peak in March 2007 came in the latest month.
Of course, one month hardly makes a trend. In the big picture, price declines can be good because they make housing more affordable and entice more buyers, which will cause home values to stabilize at some point.
But housing prices show little sign of stabilizing so far. Three of the four cities that saw the biggest run-ups in this decade's housing bubble are now seeing huge declines: Miami (down 39.6 percent from its peak), Los Angeles (down 35.8 percent), and San Diego (down 38.4 percent). The exception is Washington, D.C., down 28.3 percent – about on par with the declines in Minneapolis (23.1 percent) or Boston (32.0 percent).
Declines in mid-level cities
Atlanta and Phoenix, cities that experienced higher-than average housing bubbles, are both down more than any of the others: 48.7 percent and 43.0 percent from their peaks, respectively.
Now, even cities with the smallest housing bubbles are joining the accelerating downward spiral – not a good sign for those looking for stability.