Property prices in 20 U.S. cities declined by 18.2% in November, the highest drop on record over the past three decades, as foreclosures climbed and sales sank.
Record foreclosures contributed to approximately $1trillion in losses worldwide. The S&P/Case-Shiller index decline was aligned with forecasts followed by an 18.1% drop in October. These dropping values have made homes more affordable.
Michelle Meyer, an economist at Barclays Capital Inc. in New York, believes that the decline has stepped up over the past months primarily because of the rise in deeply low-cost foreclosure sales.
Economists anticipate that the 20-city index would decline by 18.4% compared to the previous year. Projection declines range from 17.4% to 20%. Compared to a year earlier, a survey showed that areas in the 20-city group decreased in price in November, led by a 33% decline in Phoenix and a 32% drop in Las Vegas. David Blitzer, chairman of the index committee at S&P, said that the fall in residential property value was persistent through November. Generally, more than half of the 20-city area had annual declines.
Several reports showed that home prices declined 2.2% in November compared to the prior month. Since the figures aren’t in sync, economists choose to focus on year-over-year changes rather than of month-to-month changes. Other reports show that property values continued to fall as foreclosures climbed. Average sales price of existing homes in December dropped by 15.3% from the prior year.
U.S. President Barack Obama has guaranteed to boost housing programmes and use the $350-billion outlay from the rescue plan to lessen foreclosures, as he battles against recession in the country.