The S&P Case Shiller Index numbers were released today and it shows home prices across the country fell 14% which is the largest decline ever recorded. The index tracks 20 metropolitan areas to gain perspective on the housing market as a whole in the United States.
The Tampa metropolitan area represents Orlando and it showed a price decline of 19.6% which is obviously far worse than the country as a whole and the seventh worst decline in the country. Unfortunately, these price declines are needed to bring the real estate market back into balance.
The areas that are currently seeing the worst declines also had record increases during the boom years so it’s to be expected if we’re going to reach an equilibrium. Unlike most commodities, demand is fairly constant with housing since most people only own one home. So the only way to make the market balance is decreasing supply by lowering prices.
I know it hurts to see your home’s value go down but it is a necessary evil.
The worst metropolitan areas are as follows:
- Las Vegas: -25.9 percent
- Miami: -24.6 percent
- Phoenix: -23 percent
- Los Angeles: -21.7 percent
- San Diego: -20.5 percent
- San Francisco: -20.2 percent
- Tampa: -19.6 percent
David Blitzer’s Comments on the Case Shiller Index Numbers on CNBC Today